Tilly's, Inc. (NYSE: TLYS, the "Company") today announced financial results for the first quarter of fiscal 2021 ended May 1, 2021.
"Fiscal 2021 is off to a record-setting start with our best first quarter net sales and best earnings per share of any quarter since becoming a public company in May 2012," commented Ed Thomas, President and Chief Executive Officer. "The second quarter is also off to a great start with a 30% increase in comparable net sales compared to fiscal 2019's pre-pandemic second quarter. We believe these results are being driven by a compelling merchandise offering and excellent execution by our corporate and store teams, as well as several favorable environmental factors, including increased consumer activity generally, the impact of federal stimulus checks on consumer spending, a return to in-person learning in many schools, and the reopening of public venues."
First Quarter Results Overview
The following comparisons refer to operating results for the first quarter of fiscal 2021 versus the first quarter of fiscal 2020 ended May 2, 2020:
Balance Sheet and Liquidity
As of May 1, 2021, the Company had $157.6 million of cash and marketable securities, including $0.8 million of withheld store lease payments and no debt outstanding. This compared to $111.1 million at the end of the first quarter last year, which included $13.3 million in withheld store lease payments and $23.7 million of borrowed cash under the Company's then-existing credit facility. The Company ended the first quarter with inventories per square foot down 2.6% relative to last year, but up 8.0% relative to fiscal 2019, which the Company believes is a reasonable position relative to the current performance of its business. Total capital expenditures for the first quarter were $5.5 million compared to $3.5 million last year, the increase being primarily due to new store openings this year.
Fiscal 2021 Second Quarter Business Update
At this time, the Company cannot predict with any certainty what future customer traffic or comparable store net sales results will be. However, based on current trends, the Company believes that its fiscal 2021 second quarter net sales and earnings per share will be improved compared to the second quarters of both fiscal 2020 and fiscal 2019 as long as its stores and e-commerce can remain in full operation throughout the quarter. The Company expects to end the second quarter of fiscal 2021 with 244 total stores compared to 238 and 229 total stores at the end of the second quarters of fiscal 2020 and 2019, respectively. The Company is providing the following updates regarding its fiscal 2021 second quarter business in comparison to fiscal 2020 and fiscal 2019:
The Company emphasizes that drawing specific conclusions from comparative financial performance against last year's results can be misleading given the various impacts of the COVID-19 pandemic, and it is challenging to predict future performance trends with any certainty due to many continuing unknowable factors in the current environment. These factors include but are not limited to: how the pandemic may continue to impact consumer habits; how the continuation or cessation of federal or state/local stimulus payments may continue to impact consumer spending; how store performance will compare relative to fiscal 2020 and fiscal 2019 over a longer period of time, particularly against last year's strong results upon the initial reopening of stores which occurred on a staggered basis over several months beginning in mid-May; how e-commerce will perform relative to the significant increases in e-commerce net sales the Company experienced during the varying periods of store closures during fiscal 2020; whether or not there will be a more typical back-to-school season this year which usually begins in late July; whether, or for how long, the recent shift away from online shopping towards stores will continue; whether any of the first quarter business the Company did in traditional back-to-school product categories will represent a pull-forward of typical back-to-school spending or if this first quarter business will be incremental to what the Company hopes will be a more normal back-to-school season this year. In light of these and other uncertainties, the Company is not providing any specific earnings guidance at this time.
Conference Call Information
A conference call to discuss these financial results is scheduled for today, June 3, 2021, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to dial (877) 407-4018 (domestic) or (201) 689-8471 (international) at 4:25 p.m. ET (1:25 p.m. PT). The conference call will also be available to interested parties through a live webcast at www.tillys.com. Please visit the website and select the "Investor Relations" link at least 15 minutes prior to the start of the call to register and download any necessary software.
A telephone replay of the call will be available until June 17, 2021, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13719420. Please note participants must enter the conference identification number in order to access the replay.
About Tillys
Tillys is a leading, destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls with an extensive selection of iconic global, emerging, and proprietary brands rooted in an active, outdoor and social lifestyle. Tillys is headquartered in Irvine, California and currently operates 244 total stores across 33 states, as well as its website, www.tillys.com.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements regarding the overall effect of the novel coronavirus (COVID-19) pandemic, including its impacts on the Company, its operations, or its future financial condition or operating results, the actions taken or to be taken in response to the COVID-19 pandemic, and the impacts thereof on the Company, its operations, or its future financial condition or operating results, expectations regarding future customer traffic and sales activities, the effects of guidance from local, state and federal governments and health organizations on its future business operations, the possibility of repaying withheld store rents, its ability to properly manage inventory levels, and any other statements about its future cash position, financial flexibility, expectations, plans, intentions, beliefs or prospects expressed by management are forward-looking statements. These forward-looking statements are based on management's current expectations and beliefs, but they involve a number of risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to, the effects of the COVID-19 pandemic (or other weather, epidemics, pandemics, or other public health issues) on the Company's business and operations, and its ability to respond thereto (including any future surges in the number of cases related thereto and the effects of the emergence from the COVID-19 pandemic on its business), its ability to respond to changing customer preferences and trends, attract customer traffic at its stores and online, execute its growth and long-term strategies, expand into new markets, continue to grow its e-commerce business, effectively manage its inventory and costs, effectively compete with other retailers, attract talented employees, enhance awareness of its brand and brand image, general consumer spending patterns and levels, the markets generally, its ability to satisfy its financial obligations, including under its credit facility and its leases, and other factors that are detailed in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC"), including those detailed in the section titled "Risk Factors" and in its other filings with the SEC, which are available from the SEC's website at www.sec.gov and from the Company's website at www.tillys.com under the heading "Investor Relations". Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company does not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. This release should be read in conjunction with the financial statements and notes thereto contained in the Company's Form 10-K.
Tilly's, Inc. Consolidated Balance Sheets (In thousands, except par value) (unaudited) |
|||||||||||
|
May 1,
|
|
January 30,
|
|
May 2,
|
||||||
ASSETS |
|
|
|
|
|
||||||
Current assets: |
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
81,015 |
|
|
$ |
76,184 |
|
|
$ |
65,133 |
|
Marketable securities |
76,633 |
|
|
64,955 |
|
|
45,981 |
|
|||
Receivables |
9,701 |
|
|
8,724 |
|
|
13,421 |
|
|||
Merchandise inventories |
65,341 |
|
|
55,698 |
|
|
67,650 |
|
|||
Prepaid expenses and other current assets |
4,956 |
|
|
6,595 |
|
|
2,092 |
|
|||
Total current assets |
237,646 |
|
|
212,156 |
|
|
194,277 |
|
|||
Operating lease assets |
219,918 |
|
|
227,881 |
|
|
252,554 |
|
|||
Property and equipment, net |
54,139 |
|
|
52,639 |
|
|
61,941 |
|
|||
Other assets |
12,530 |
|
|
12,797 |
|
|
7,422 |
|
|||
Total assets |
$ |
524,233 |
|
|
$ |
505,473 |
|
|
$ |
516,194 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
||||||
Current liabilities: |
|
|
|
|
|
||||||
Accounts payable |
$ |
35,860 |
|
|
$ |
24,983 |
|
|
$ |
24,837 |
|
Accrued expenses |
29,110 |
|
|
30,682 |
|
|
13,591 |
|
|||
Line of credit |
? |
|
|
? |
|
|
23,675 |
|
|||
Deferred revenue |
12,913 |
|
|
13,492 |
|
|
10,719 |
|
|||
Accrued compensation and benefits |
14,489 |
|
|
9,899 |
|
|
5,098 |
|
|||
Current portion of operating lease liabilities |
53,633 |
|
|
54,503 |
|
|
65,595 |
|
|||
Total current liabilities |
146,005 |
|
|
133,559 |
|
|
143,515 |
|
|||
Noncurrent operating lease liabilities |
203,627 |
|
|
211,292 |
|
|
229,127 |
|
|||
Other |
? |
|
|
? |
|
|
558 |
|
|||
Total liabilities |
349,632 |
|
|
344,851 |
|
|
373,200 |
|
|||
Stockholders' equity: |
|
|
|
|
|
||||||
Common stock (Class A) |
23 |
|
|
22 |
|
|
22 |
|
|||
Common stock (Class B) |
7 |
|
|
8 |
|
|
8 |
|
|||
Preferred stock |
? |
|
|
? |
|
|
? |
|
|||
Additional paid-in capital |
158,454 |
|
|
155,437 |
|
|
153,878 |
|
|||
Retained earnings (Accumulated deficit) |
16,094 |
|
|
5,135 |
|
|
(11,115 |
) |
|||
Accumulated other comprehensive income |
23 |
|
|
20 |
|
|
201 |
|
|||
Total stockholders' equity |
174,601 |
|
|
160,622 |
|
|
142,994 |
|
|||
Total liabilities and stockholders' equity |
$ |
524,233 |
|
|
$ |
505,473 |
|
|
$ |
516,194 |
|
Tilly's, Inc. Consolidated Statements of Operations (In thousands, except per share data) (unaudited) |
|||||||
|
Thirteen Weeks Ended |
||||||
|
May 1, 2021 |
|
May 2, 2020 |
||||
Net sales |
$ |
163,157 |
|
|
$ |
77,289 |
|
Cost of goods sold (includes buying, distribution, and occupancy costs) |
108,318 |
|
|
75,695 |
|
||
Gross profit |
54,839 |
|
|
1,594 |
|
||
Selling, general and administrative expenses |
39,965 |
|
|
29,995 |
|
||
Operating income (loss) |
14,874 |
|
|
(28,401 |
) |
||
Other (expense) income, net |
(115 |
) |
|
409 |
|
||
Income (loss) before income taxes |
14,759 |
|
|
(27,992 |
) |
||
Income tax expense (benefit) |
3,800 |
|
|
(10,597 |
) |
||
Net income (loss) |
$ |
10,959 |
|
|
$ |
(17,395 |
) |
Basic earnings (loss) per share of Class A and Class B common stock |
$ |
0.37 |
|
|
$ |
(0.59 |
) |
Diluted earnings (loss) per share of Class A and Class B common stock |
$ |
0.36 |
|
|
$ |
(0.59 |
) |
Weighted average basic shares outstanding |
29,878 |
|
|
29,677 |
|
||
Weighted average diluted shares outstanding |
30,529 |
|
|
29,677 |
|
Tilly's, Inc. Consolidated Statements of Cash Flows (In thousands) (unaudited) |
|||||||
|
Thirteen Weeks Ended |
||||||
|
May 1,
|
|
May 2,
|
||||
Cash flows from operating activities |
|
|
|
||||
Net income (loss) |
$ |
10,959 |
|
|
$ |
(17,395 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
||||
Depreciation and amortization |
4,324 |
|
|
5,024 |
|
||
Insurance proceeds from casualty loss |
117 |
|
|
? |
|
||
Stock-based compensation expense |
366 |
|
|
501 |
|
||
Impairment of long-lived assets |
? |
|
|
333 |
|
||
Loss on disposal of assets |
62 |
|
|
? |
|
||
Gain on sales and maturities of marketable securities |
(29 |
) |
|
(330 |
) |
||
Deferred income taxes |
285 |
|
|
591 |
|
||
Changes in operating assets and liabilities: |
|
|
|
||||
Receivables |
250 |
|
|
(5,936 |
) |
||
Merchandise inventories |
(9,760 |
) |
|
(10,749 |
) |
||
Prepaid expenses and other current assets |
1,615 |
|
|
2,411 |
|
||
Accounts payable |
10,617 |
|
|
4,661 |
|
||
Accrued expenses |
(1,745 |
) |
|
(5,284 |
) |
||
Accrued compensation and benefits |
4,590 |
|
|
(2,092 |
) |
||
Operating lease liabilities |
(1,795 |
) |
|
9,741 |
|
||
Deferred revenue |
(579 |
) |
|
(1,042 |
) |
||
Net cash provided by (used in) operating activities |
19,277 |
|
|
(19,566 |
) |
||
Cash flows from investing activities |
|
|
|
||||
Purchases of property and equipment |
(5,492 |
) |
|
(3,548 |
) |
||
Proceeds from sale of property and equipment |
10 |
|
|
? |
|
||
Insurance proceeds from casualty loss |
29 |
|
|
? |
|
||
Purchases of marketable securities |
(36,644 |
) |
|
(5,996 |
) |
||
Proceeds from marketable securities |
25,000 |
|
|
30,108 |
|
||
Net cash (used in) provided by investing activities |
(17,097 |
) |
|
20,564 |
|
||
Cash flows from financing activities |
|
|
|
||||
Proceeds from line of credit |
? |
|
|
23,675 |
|
||
Dividends paid |
? |
|
|
(29,677 |
) |
||
Proceeds from exercise of stock options |
2,651 |
|
|
? |
|
||
Net cash provided by (used in) financing activities |
2,651 |
|
|
(6,002 |
) |
||
Change in cash and cash equivalents |
4,831 |
|
|
(5,004 |
) |
||
Cash and cash equivalents, beginning of period |
76,184 |
|
|
70,137 |
|
||
Cash and cash equivalents, end of period |
$ |
81,015 |
|
|
$ |
65,133 |
|
Tilly's, Inc. Store Count and Square Footage |
|||||||||
|
Store Count at Beginning of Quarter |
|
New Stores Opened During Quarter |
|
Stores Permanently Closed During Quarter |
|
Store Count at End of Quarter |
|
Total Gross Square Footage End of Quarter (in thousands) |
2020 Q1 |
240 |
|
? |
|
1 |
|
239 |
|
1,768 |
2020 Q2 |
239 |
|
? |
|
1 |
|
238 |
|
1,760 |
2020 Q3 |
238 |
|
1 |
|
1 |
|
238 |
|
1,753 |
2020 Q4 |
238 |
|
1 |
|
1 |
|
238 |
|
1,751 |
2021 Q1 |
238 |
|
2 |
|
2 |
|
238 |
|
1,753 |
Note: The store counts noted above do not reflect the impact of stores temporarily closed as a result of the COVID-19 pandemic.
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