Tilly's Inc (TLYS) Reports Decreased Sales and Net Loss in Q3 Fiscal 2023
Tilly's Inc (NYSE:TLYS) experienced a 6.4% decrease in total net sales and a net loss of $0.8 million in Q3 fiscal 2023.
Gross profit margin declined to 29.3% from 30.7% in the same quarter last year.
The company ended the quarter with $93.9 million in cash and marketable securities, and no debt.
For Q4 fiscal 2023, Tilly's Inc (NYSE:TLYS) estimates net sales to be in the range of $172 million to $178 million with a potential loss per share of $(0.12) to $(0.20).
On November 30, 2023, Tilly's Inc (NYSE:TLYS) released its 8-K filing, announcing its financial results for the third quarter of fiscal 2023, which ended on October 28, 2023. The company reported a sequential improvement over the first two quarters of the fiscal year, despite the ongoing economic difficulties, particularly affecting its young customer demographic.
Financial Performance Overview
Tilly's Inc (NYSE:TLYS) reported total net sales of $166.5 million, a decrease of 6.4% compared to $177.8 million in the third quarter of the previous fiscal year. Comparable net sales, including both physical stores and e-commerce, decreased by 9.0%. Gross profit was $48.7 million, or 29.3% of net sales, a decline from 30.7% last year, primarily due to increased markdowns and inventory valuation reserves. Selling, general, and administrative expenses increased to $51.2 million, or 30.8% of net sales, up from 27.1% last year, influenced by non-cash store impairment charges and increased marketing and payroll expenses.
The company's operating loss was $(2.5) million, or (1.5)% of net sales, compared to an operating income of $6.3 million, or 3.6% of net sales, in the same quarter last year. However, Tilly's Inc (NYSE:TLYS) did see an increase in other income, primarily due to higher returns on marketable securities. The net loss for the quarter was $(0.8) million, or $(0.03) per share, compared to a net income of $5.1 million, or $0.17 per diluted share, in the prior year.
Balance Sheet and Liquidity
As of October 28, 2023, Tilly's Inc (NYSE:TLYS) had a strong liquidity position with $93.9 million in cash and marketable securities and no debt. Inventory levels were managed effectively, with a slight increase in cost per square foot but a decrease in unit inventories per square foot compared to the previous year. Year-to-date capital expenditures amounted to $10.5 million, with the company planning to spend approximately $13 million for the full fiscal year, including investments in new stores and technology upgrades.
Outlook and Future Plans
For the fourth quarter of fiscal 2023, Tilly's Inc (NYSE:TLYS) anticipates net sales to range between $172 million to $178 million, with a comparable net sales decrease of approximately 6% to 9%. The company estimates a pre-tax loss of $(5.0) million to $(8.0) million and a loss per share of $(0.12) to $(0.20). Looking ahead to fiscal 2024, Tilly's Inc (NYSE:TLYS) plans to limit capital expenditures to $15 million, focusing on opening 4 new stores and continuing system enhancements.
Despite the challenging economic environment, Tilly's Inc (NYSE:TLYS) is taking strategic steps to navigate the market and position itself for future growth. Investors and analysts are encouraged to review the detailed financial statements and listen to the conference call for a deeper understanding of the company's performance and strategies.
Explore the complete 8-K earnings release (here) from Tilly's Inc for further details.
This article first appeared on GuruFocus.
