Tilly’s Inc. reported sales for the nine-week period ended January 1 grew 16.5 percent and said it expects to report its most profitable fourth quarter since becoming a public company.

The retailer provided its update in advance of its virtual participation in the ICR Conference 2022 on January 10-12, 2022.

“Based on our strong 2021 holiday period results, we expect to report our most profitable fourth quarter since becoming a public company and our most profitable full fiscal year on record,” commented Ed Thomas, president and chief executive officer. “We believe these results were driven by favorable market conditions and a compelling merchandise assortment. I want to thank our entire team of store, distribution center and corporate office associates for all of their hard work and dedication in producing these impressive results.”

Total net sales of $173.3 million increased by 16.5 percent for the 2021 holiday period compared to $148.7 million for last year’s comparable nine-week holiday period ended January 2, 2021 (the “2020 holiday period”).

Total comparable net sales, including both physical stores and e-commerce, increased by 14.1 percent for the 2021 holiday period compared to an increase of 2.7 percent for the 2020 holiday period.

Comparable net sales in physical stores increased by 23.2 percent for the 2021 holiday period compared to a decrease of 12.4 percent during the 2020 holiday period. Comparable net sales in physical stores increased by a double-digit percentage in all but one of 14 geographic markets compared to the 2020 holiday period. Net sales in physical stores represented 74.5 percent of total net sales for the 2021 holiday period compared to 68.4 percent of total net sales during the 2020 holiday period.

E-commerce net sales decreased by 5.7 percent for the 2021 holiday period compared to an increase of 65.2 percent during the 2020 holiday period. E-commerce net sales represented 25.5 percent of total net sales for the 2021 holiday period compared to 31.6 percent of total net sales during the 2020 holiday period. Compared to the 2019 holiday period, e-commerce net sales increased by 57.4 percent.

The company believes these results were driven by favorable market conditions, a compelling merchandise assortment, and a shift in our customers’ preference for shopping in physical stores over e-commerce compared to last year’s holiday period. Last year, the impacts of the COVID-19 pandemic, including government-mandated restrictions on customer traffic in physical stores and reductions in store operating hours in effect during the 2020 holiday period, resulted in increased online shopping relative to physical stores compared to previous years.

As of January 3, 2022, the company had $188.9 million of cash and marketable securities and no debt outstanding after paying an aggregate of $61.6 million in special cash dividends to shareholders in July and December 2021. This compares to $169.1 million of cash and marketable securities and no debt outstanding as of January 4, 2021, which was the comparable fiscal date last year.

The scope and nature of the impacts of the pandemic on the company’s business continue to evolve. As a result, there can be no guarantee that the company’s financial results through the remainder of the fourth quarter will remain consistent with those of the 2021 holiday period. In addition, the foregoing information does not reflect the full financial results for the 2021 holiday period. The company’s actual financial results for the fiscal 2021 fourth quarter and full fiscal year ending January 29, 2022, are subject to completion of the period, the finalization of its normal quarter-end and year-end accounting procedures, and the audit of its fiscal 2021 financial statements. The company currently expects to report its actual results for the fiscal 2021 fourth quarter and full fiscal year on or about March 10, 2022.

Fiscal 2021 Fourth Quarter Outlook Update
Based on the company’s net sales results for the 2021 holiday period and historical trends, the company expects its net sales to be in the range of approximately $203 million to $205 million and its earnings per share to be in the range of approximately $0.39 to $0.42 per diluted share for the fourth quarter of fiscal 2021, representing the company’s most profitable fourth quarter in its public-company history. The company expects to end fiscal 2021 with 241 total stores after closing two stores in late January 2022.

Previously, guidance called for sales in the range of approximately $210 million to $215 million and earnings per diluted share to be in the range of 42 cents to 50 cents.

Photo courtesy Tilly’s