Tilly’s Reduces Q4 Guidance on Soft Holiday Sales

Tillys, Inc. announced that comparable store sales, which include e-commerce sales, for the ten weeks ended Jan. 5 decreased 1 percent, compared to a 5 percent increase for the same period last year.

Daniel Griesemer, president and CEO, commented, Our quarter-to-date sales reflect strong comparable store sales results in the peak weekend of Black Friday/Cyber Monday and in late December/early January, with soft traffic and sales in between. We have exited the holiday season with our inventory well positioned, having maintained our strong pricing discipline and brand integrity. We transition into Spring with complete confidence in our business model and remain focused on long-term quality growth.

Fourth Quarter 2012 Outlook

Based on the results for the Holiday period, GAAP net income for the fourth quarter using the anticipated effective tax rate of 32.9 percent is expected to be in the range of $9.0 million to $9.3 million, or 32 to 33 cents per diluted share, and assumes a diluted share count of 28.2 million shares, compared to 20.5 million diluted shares in the fourth quarter of last year. The companys 2012 fourth quarter includes one additional week compared to last year, and our 2012 fiscal year is a 53-week year compared to a 52-week fiscal 2011.

On an adjusted basis, using an anticipated on-going effective tax rate of 40 percent, adjusted net income in the fourth quarter is expected to be in the range of $8.1 million to $8.4 million, or 29 to 30 cents per diluted share. In Nov 20, in reporting third-quarter results, it predicted earnings ranging between 33 and 36 cents a share.

The company has revised its earnings per diluted share outlook to reflect fourth quarter guidance. On a GAAP basis, and using an anticipated full year effective tax rate of 32.9 percent, net income for fiscal year 2012 is expected to be in the range of 89 to 90 cents per diluted share, and assumes a diluted share count of 26.1 million shares, compared to 20.5 million diluted shares for the full year 2011.
On an adjusted basis, excluding the one-time charge to recognize life-to-date stock-based compensation recorded in the second quarter of 2012, adjusted net income, using a 40 percent adjusted on-going effective tax rate for the full year, is expected to be in the range of $0.87 to $0.88 per diluted share.