Net income doubles at apparel retailer Tilly's in Q1FY16

01 Jun '15

3 min read

For the first fiscal quarter ended May 2, 2015, net income doubled over the same quarter of previous fiscal at apparel retailer and NYSE listed, Tilly’s, Inc.

Net income for the first quarter of fiscal 2016 reached $1.3 million, or $0.05 per diluted share as against
$0.6 million or $0.02 per diluted share in the same quarter of fiscal 2015.

Total net sales for the quarter ended May 2, 2015 amounted to $120.2 million, up 8.1 per cent compared to $111.1 million in the corresponding quarter of prior fiscal.

“Comparable store sales, which include e-commerce sales, increased slower at 2.0 per cent over the same 13-week period in fiscal 2015,” Tilly’s said in a press release.

Gross profit in the reporting quarter rose 15.3 per cent to $36.1 million as against $31.3 million in the prior fiscal first quarter. While gross margin was 30.0 per cent compared to 28.2 per cent.

“The 180 basis point increase in gross margin was primarily due to a 90 basis point increase in product margins and lower buying, distribution and occupancy costs as a percentage of net sales,” it explained.

The retailer added, “This was possible due to positive comparable store sales, and a favourable rent adjustment related to prior years.”

Operating income for the quarter under review touched $2.1 million, compared to operating income of $1.1 million in the same quarter of fiscal 2015.

Tilly’s attracted an effective tax rate of approximately 40 per cent in the first quarter of fiscal 2016 compared to 45 per cent in last fiscal’s first quarter, reflecting a discrete item related to stock option forfeitures.

As of May 2, 2015, the Company had $79.2 million of cash and marketable securities and no borrowings or debt outstanding on its revolving credit facility.

Tilly’s expects second quarter comparable store sales to be in the range of a decline of 2 per cent to an increase of 2 per cent and net income per diluted share to be in the range of $0.01 to $0.05.

“This assumes an anticipated effective tax rate of approximately 40 per cent and a weighted average diluted share count of 28.5 million shares,” it noted.

“Our first quarter results illustrate continued progress on our initiatives to increase sales and profitability, as we delivered positive comparable store sales and solid earnings growth,” CEO Daniel Griesemer said.

“We expanded our gross profit and ended the quarter with inventory well positioned for the summer and back-to-school seasons,” he too added.

Tilly's is a fast-growing destination specialty retailer of West Coast inspired apparel, footwear and accessories and as of May 27, 2015 operated 213 stores and a website. (AR)

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