Tilly’s full-year net sales fell by $49.2m to $623m while comparable net sales, including physical stores and e-commerce, declined by 10.6% and a net loss of $34.5m was reported.
Co-founder, interim president and CEO Hezy Shaked declared that Tilly’s was revisiting and evaluating “any opportunity for potential improvement” by challenging itself to improve despite headwinds from the macro environment”.
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Executive vice president, chief financial officer and corporate secretary Mike Henry added: “We are focused on driving sales increases at healthy profit margins, This starts with providing compelling merchandise.”
He continued: “This is just the start of our efforts to reinvigorate our approach to marketing and meet our customers where they are.”
Henry also explained the company had experienced a difficult period since achieving record earnings in the fiscal year 2021 following the pandemic.
“Our business has been challenged while our young customer demographic has faced persistent inflationary pressures, record levels of credit card debt, and a shift in consumer preferences for experiences over goods following the pandemic,” he said.
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By GlobalDataHenry was keen to add that the company will also complete upgrading its warehouse management systems and invest in markdown optimisation and merchandise allocation tools to improve the efficiency of its inventory management and ongoing IT infrastructure and cybersecurity investments to protect its business interests.
In Tilly’s FY results, net sales from physical stores were $485.6m, a decrease of $45.5m or 8.6%, compared to $531m last year, with a comparable store net sales decrease of 12.2%, representing 77.9% of total net sales.
Net sales from e-commerce were reported at $137.5m, a decrease of $3.7m or 2.6%, compared to $141m last year, representing 22.1% of total net sales.
Key results from Tilly’s Q4:
Tilly’s also reported its Q4 results for the 14 weeks ended 3 February 2024.
- Total net sales were $173m, a decrease of $7.3m or 4.1%, compared to $180.4m last year
- Operating loss was $8.5m, or 4.9% of net sales, compared to $1.4m
- Net loss was $20.6m compared to $0.1m the previous year
- Net sales from physical stores were $125.6m, a decrease of $9.5m or 7.0%, compared to $135m last year, with a comparable store net sales decrease of 11.8%
- Net sales from e-commerce was $47.4m, an increase of $2.1m or 4.7%, compared to $45.3m last year. E-commerce net sales represented 27.4% of total net sales.
Tilly’s Q1 outlook for fiscal year 2024
Based on the results of comparable net sales for the current quarter-to-date and historical trends, the company has estimated that its net sales for the first quarter (Q1) of fiscal year 2024 will fall in the range of $109m to $119m.
Tilly’s expects pre-tax loss to be in the range of $17m to $22m and loss per share for its Q1 to be in the range of $0.42 to $0.54.
The apparel company also anticipates the opening of 247 stores at the end of Q1 compared to 248 at the end of last year’s first quarter. Five planned store closures are expected to take place during fiscal 2024 and three of those will happen in the first quarter with more possibly taking place.
“We do not expect to close a large number of stores at this time, but we will be very disciplined and conscientious in our decision-making on store renewals and kick-out clauses in light of the current environment and our specific performance in each location,” said Henry.
