Tilly’s Inc. reported that its fourth-quarter earnings came in higher than expected due to improving product margins and expense controls.
The action-sports retailer announced that its comparable-store sales, which include e-commerce sales, for the fourth quarter ended January 28, 2017 increased 0.1 percent versus the comparable prior-year period. Based on these results, the company now expects fiscal 2016 fourth-quarter operating income to be in the range of approximately $10 million to $10.5 million, and earnings per share to be in the range of 21 to 22 cents a share. These ranges assume an anticipated effective tax rate of approximately 40 percent and weighted average diluted shares of approximately 29 million. Earnings per diluted share for the fourth quarter of fiscal 2015 were 10 cents a share.
“We are pleased to provide a direct return to our shareholders via this special dividend,” commented Ed Thomas, president and chief executive officer. “The improvement in our fourth quarter outlook reflects better than anticipated product margins and expenses on same-store sales that were within our original outlook range.”
The company’s previous outlook ranges for the fourth quarter included comparable-store sales of flat to +2 percent, operating income of $7.5 million to $9.5 million and earnings per diluted share of 15 to 20 cents, assuming an anticipated effective tax rate of approximately 40 percent and weighted average diluted shares of approximately 28.7 million.
The company’s fiscal 2016 operating results are subject to finalization and audit of its financial statements. The company currently expects to report final results for the fiscal 2016 fourth quarter and full fiscal year on March 13, 2017.
Tilly’s also announced that its board of directors has declared a special cash dividend of 70 cents per share, or approximately $20 million in the aggregate, on the company’s outstanding Class A and Class B common stock.
This one-time special dividend is payable on February 24, 2017 to stockholders of record at the close of business on February 15, 2017. The company cannot guarantee any future dividends. The declaration and payment of future dividends, if any, will be at the sole discretion of the board of directors based on its consideration of various factors, including the company’s operating results, financial condition and anticipated capital requirements.
In anticipation of declaring the special dividend, the company entered into an amended and restated credit facility with Wells Fargo Bank N.A., effective as of January 26, 2017, which, among other things, allowed for the declaration and payment of the special dividend and extended the maturity date of such facility to January 26, 2020.
Photo courtesy Tilly’s
