Retailer Tilly's posts 69% slide in Q2FY15 net income
Partly from a higher effective tax rate, net income tumbled 69% from a year ago quarter, at West Coast inspired apparel, accessories and NYSE listed retailer Tilly’s, Inc in the second fiscal quarter ended August 2, 2014.
In the second quarter of 2014, net income reached $1.3 million, or $0.05 per diluted share, based on a weighted average diluted share count of 28.0 million shares and an effective tax rate of approximately 46%, from a higher rate than expected due to certain stock option forfeitures.
This compares to net income in the second quarter of 2013 of $4.3 million, or $0.15 per diluted share, based on a weighted average diluted share count of 28.1 million shares and an effective tax rate of 40%, Tilly’s said.
Tilly’s reported net sales of $123.1 million in second quarter of 2014, stable compared to $123.0 million in the second quarter of 2013. However, comparable store sales, which include e-commerce sales, declined 7.1%.
Deleverage of occupancy costs and a 40 basis point decrease in product margins led to Tilly’s witnessing gross margin slipping to 28.2% versus 30.8% in the second quarter of 2013. Gross profit fell to $34.7 million in the quarter under review from $37.9 million in thirteen weeks to August 3, 2013.
Operating income reached $2.3 million in second quarter of 2014 compared to $7.2 million in the second quarter of 2013. As of August 2, 2014, the retailer had $57.4 million of cash and marketable securities and no borrowings or debt outstanding on its revolving credit facility.
For the third quarter, Tilly’s expects comparable store sales to decline in mid-single digits, and net income per diluted share to be in the range of $0.09 to $0.13 assuming an effective tax rate of 41% and a weighted average diluted share count of 28.1 million shares.
Tilly’s is headquartered in Southern California and as of August 27, 2014, operated 206 stores and an online store.
Fibre2fashion News Desk - India