Tilly’s(TLYS) - 2025 Q4 - Annual Report

Financial Performance - Net sales for fiscal year 2024 were $569,453,000, a decrease of 8.6$623,083,000 in fiscal year 2023[176] - Comparable store sales declined by 8.0% in fiscal year 2024, following a 10.6% decrease in fiscal year 2023[176] - Gross profit for fiscal year 2024 was $149,697,000, representing 26.3$199,546,000, or 35.0% of net sales, compared to 31.6% in fiscal year 2023[176] - Operating loss for fiscal year 2024 was $(49,849,000), compared to an operating loss of$(30,982,000) in fiscal year 2023[176] - Net loss was $46.2 million, or$1.54 per share, compared to a net loss of $34.5 million, or$1.16 per share, last year[184] - Operating loss widened to $49.8 million, or 8.8$31.0 million, or 5.0% of net sales, last year[182] - Total net sales decreased by 8.6% to $569.5 million compared to fiscal 2023, with comparable net sales down 8.0$124,728,000, accounting for 21.9% of net sales[176] - The average net sales per brick-and-mortar store decreased to $1,791,000 in fiscal year 2024 from$1,944,000 in fiscal year 2023[176] - Comparable store net sales decreased by 8.0%, with physical store sales down 8.4% and e-com sales down 9.3%[186] Capital Expenditures and Store Closures - Total capital expenditures for fiscal year 2025 are expected to be between $5 million and$10 million for new store openings and upgrades[165] - The company plans to close at least eight stores during the first half of fiscal year 2025[165] Working Capital and Cash Flow - Working capital decreased to $31.6 million from$71.5 million, a decline of $39.9 million[189] - Net cash used in operating activities was$42.0 million, significantly higher than $6.7 million last year, primarily due to lower net sales[192] Credit and Compliance - The company entered into a credit agreement providing for a revolving credit facility of up to$65.0 million[197] - As of February 1, 2025, the company was in compliance with all covenants and had no outstanding borrowings under the credit agreement[203] - The company has no outstanding borrowings under its credit facility as of February 1, 2025, and February 3, 2024[226] Accounting Policies and Estimates - The company has not experienced material impacts on historical results due to variances in critical accounting policies[212] - Revenue is recognized net of estimated sales returns, which are based on historical sales return results[214] - The company estimates breakage revenue from unredeemed gift cards based on historical redemption trends[215] - Unredeemed loyalty program awards are accrued as deferred revenue, impacting net sales[216] - Inventory is stated at the lower of cost or net realizable value, requiring management estimates for markdowns[217] - The company evaluates long-lived assets for impairment based on estimated future cash flows compared to carrying values[220] - Deferred tax assets are recorded based on the likelihood of realization, considering future taxable income and tax planning strategies[223] Economic and Market Conditions - The impact of inflation on operations has been deemed immaterial, although it may affect consumer behavior[227] - The company sources most merchandise domestically and has not been materially impacted by foreign exchange rate changes[228]