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Tilly's (TLYS) Posts Decent Holiday Sales, Comps Tick Up 2.7%

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Amid a challenging retail backdrop and ongoing coronavirus crisis, Tilly’s, Inc. TLYS posted decent holiday sales number. Markedly, efficient inventory and expense management helped the company navigate through this tough operating environment and end the 2020 holiday period with as much cash as last year at this time. This specialty retailer of casual apparel, footwear and accessories also witnessed sturdy e-commerce business during the festive season.

Let’s Take a Closer Look

Tilly’s highlighted that total net sales jumped 3.3% to $148.7 million during the holiday shopping period — the nine-week period ended Jan 2, 2021 — compared with $143.9 million for last year’s nine-week period ended Jan 4, 2020.

Impressively, total comparable net sales, including both physical stores and e-commerce, rose 2.7% for the 2020 holiday period, against a decline of 2% in the year-ago period. Management stated that comparable net sales of Footwear, Women’s and Men’s increased. This was partly offset by decreases in Boys, Accessories and Girls.

We note that comparable net sales in physical stores fell 12.4% for the 2020 holiday period compared with a decline of 2.7% during the 2019 holiday period. The metric decreased in all geographic markets. Net sales in physical stores represented 69% of total net sales for the 2020 holiday period compared with 80.5% of total net sales during the 2019 holiday period.

Remarkably, e-commerce net sales surged 65.2% during the 2020 holiday season compared with a meager increase of 1% in the 2019 holiday period. E-commerce net sales increased across all 50 states, and represented 31% of total net sales for the 2020 holiday period. Management informed that the ongoing pandemic and resultant government restrictions on customer traffic in physical stores and lower store operating hours in effect during the holiday period, led to increase in online shopping.

As of Jan 4, 2021, Tilly’s had $169.1 million of cash and marketable securities, including an aggregate of $2.3 million of withheld store lease payments.

Shares of this Zacks Rank #3 (Hold) company rose about 5% during the trading session on Jan 11. In the past three months, the stock has increased 43.6% compared with the industry’s rally of 54.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Wrapping Up

No wonder, the holiday season, which accounts for a sizeable chunk of yearly revenues, is a make or break for retailers. Taking into account consumers’ product preferences and growing inclination toward online shopping due to social distancing, and greater stay at-home and work-from-home trends, retailers ramped up investments in digitization to provide a seamless shopping experience. To beat the COVID-19 blues, retailers kicked off holiday shopping deals earlier this year with an extended promotional period to avoid rush at stores, given the health concerns.

We note that L Brands’ LB posted strong holiday sales results that exceeded management’s initial expectations. Strength in the Bath & Body Works segment and improved Victoria’s Secret performance aided the upbeat outcome. Comparable sales for the nine-week period ended Jan 2, 2021, increased 5%.

GameStop GME informed that its comparable store sales for the nine-week period ended Jan 2, 2021 increased 4.8%. Notably, e-commerce sales surged 309%, and represented about 34% of total company sales. Again, Zumiez ZUMZ reported comparable sales increase of 1.7% for the ten-week period ended Jan 9, 2021. Meanwhile, total sales dipped 0.7% during the holiday period.

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