Net sales of US retailer Tilly's $123.6 mn in Q1 FY23

Sales across both the physical stores and e-commerce platforms saw decreases in Q1 FY23. Physical stores generated $97.8 million, a decrease of $19.7 million or 16.7 per cent, compared to $117.5 million the previous year. Despite opening seven additional stores (from 241 to 248) compared to Q1 FY22, comparable store net sales experienced a drop of 19.7 per cent.

The company’s e-commerce net sales reached $25.8 million, marking a decrease of $2.5 million or 8.7 per cent, compared to $28.3 million in the previous year. This sales channel's contribution to total net sales slightly increased, making up 20.9 per cent of total net sales compared to 19.4 per cent last year, the company said in its financial results for Q1 FY23, ended April 29, 2023.

Gross profit, which includes buying, distribution, and occupancy costs, was $25.9 million or 21 per cent of net sales. This represented a sharp decline compared to $43.8 million or 30.1 per cent of net sales last year, with product margins shrinking by 290 basis points due primarily to increased markdowns implemented to manage inventory levels.

"We believe the highly uncertain and inflationary economic environment continues to have a detrimental impact on our pre-teen, teen, and young adult customer demographic," said Ed Thomas, president and chief executive officer. "While we believe our product assortments are trend right, the impact of inflation and potential recessionary concerns remain a risk to our business over the near term.”

Selling, general, and administrative expenses rose to $43.2 million or 34.9 per cent of net sales in Q1 FY23, compared to $42.7 million or 29.3 per cent of net sales last year.

The company reported an operating loss of $17.3 million or 14 per cent of net sales. This is a sharp contrast to the operating income of $1.1 million or 0.8 per cent of net sales last year. However, the company did see an increase in other income, which rose to $1.1 million compared to a break-even point last year.

Net loss was $12 million or $0.40 per share in Q1 FY23, compared to a net income of $0.8 million or $0.03 per diluted share last year.

Fibre2Fashion News Desk (DP)