Release Date: March 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tilly's Inc (TLYS, Financial) has made several organizational changes in their merchandising team to stabilize and improve sales trajectory.
- The company has planned reduced inventory commitments for fiscal 2025 to target faster returns and improve product margins.
- Tilly's Inc (TLYS) is targeting significant expense reductions through diligent scrutiny of store leases and strict management of payroll.
- The company plans to continue investing in expanded marketing efforts and carefully selected new store opportunities.
- Tilly's Inc (TLYS) ended the fiscal year with a strong cash position of $47 million and available undrawn borrowing capacity of $48 million.
Negative Points
- Total net sales for the fourth quarter of fiscal 2024 decreased by 14.9% compared to the previous year.
- Comparable net sales, including both physical stores and e-commerce, decreased by 11.2% for the quarter.
- E-commerce net sales decreased by 17.8%, indicating a significant drop in online sales performance.
- The company reported a net loss of $13.7 million for the fourth quarter, compared to a $20.6 million loss in the previous year.
- Tilly's Inc (TLYS) closed 10 stores during the fourth quarter, resulting in a net decrease of 8 stores for the fiscal year.
Q & A Highlights
Q: Can you explain the potential tariff impact on Tilly's private label products?
A: Hezy Shaked, Executive Chairman and CEO, stated that the tariff impact would be minor. Only one vendor indicated a potential cost increase, which would be shared, but it is not significant at this stage.
Q: How is Tilly's planning to handle the current economic backdrop and potential recession impacts?
A: Hezy Shaked expressed hope that changes in the merchandise assortment would help mitigate economic headwinds, although there is no guarantee.
Q: What are Tilly's plans regarding store openings and closures, and how does this affect CapEx?
A: Hezy Shaked mentioned a focus on closing unprofitable stores while being opportunistic about opening new ones. Michael Henry, CFO, added that two new stores have opened, with seven closures planned. CapEx will be limited, with a placeholder for five new stores.
Q: Can you provide insights into the fourth-quarter comp sales performance and what affected the results?
A: Michael Henry explained that November was the weakest month, with a 21% decline, while December and January saw 6-7% declines. The overall fourth-quarter comp was down 11%, below expectations.
Q: What is the status of Tilly's merchandising and assortment changes, and when will they be fully implemented?
A: Hezy Shaked indicated that the merchandising team was realigned due to missed targets in the fourth quarter. The new team is expected to have a full impact by July, with current efforts focused on clearing outdated inventory.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
