US retailer Tilly's registers sales of $166.5 million in Q3

In the third quarter, net sales from physical stores were $132.4 million, a decrease of $9.1 million or 6.4 per cent, compared to $141.5 million last year, with a comparable store net sales decline of 9.1 per cent. Net sales from physical stores represented 79.6 per cent of total net sales both this year and last year. The company ended the third quarter with 249 total stores compared to 247 total stores at the end of the third quarter last year.

Net sales from e-commerce were $34.0 million, a decrease of $2.3 million or 6.2 per cent, compared to $36.3 million last year. E-commerce net sales represented 20.4 per cent of total net sales both this year and last year.

Gross profit, including buying, distribution, and occupancy costs, was $48.7 million, or 29.3 per cent of net sales in the third quarter, compared to $54.6 million, or 30.7 per cent of net sales, last year. Buying, distribution, and occupancy costs deleveraged by 90 basis points, despite being $1.0 million lower than last year primarily due to a decrease in distribution costs resulting from reduced freight costs, partially offset by higher occupancy costs as a result of two net additional stores compared to last year. Product margins declined by 50 basis points primarily due to increased markdowns and estimated inventory valuation reserves.

Total comparable net sales through November 28, 2023, decreased by 6.5 per cent with a comparable net sales decrease in physical stores of 13.6 per cent and an increase in e-commerce comparable net sales of 11 per cent. Based on current quarter-to-date comparable net sales results and current and historical trends, the company currently estimates that its fourth quarter net sales will be in the range of approximately $172 million to $178 million, translating to an estimated comparable net sales decrease in the range of approximately 6-9 per cent compared to last year, the company said in a press release.

"Our third quarter results represent a sequential improvement over the first and second quarters of the fiscal year. We continue to work towards protecting product margins, managing inventories and controlling operating expenses amid a continuing difficult economic environment, particularly for our young customer demographic," said Ed Thomas, president and chief executive officer. "Although more promotionally driven than in years past, we were pleased to produce comparable net sales growth compared to last year over Black Friday weekend."

The company currently estimates its SG&A expenses for the fourth quarter of fiscal 2023 to be approximately $55 million to $56 million, pre-tax loss to be in the range of approximately $5 million to $8 million, and estimated income tax rate to be approximately 26 per cent. The company currently expects its loss per share for the fourth quarter of fiscal 2023 to be in the range of $0.12 to $0.20 based on estimated weighted average shares of approximately 29.9 million. The company currently expects to have 248 stores open at the end of the fiscal, a net decrease of one store from the end of last fiscal.

The company currently expects its total capital expenditures for fiscal 2024 not to exceed $15 million, primarily for the construction of 4 new stores and continued upgrades to certain distribution and information technology systems.

Fibre2Fashion News Desk (RR)