Tilly’s(TLYS) - 2025 Q2 - Quarterly Report

Financial Performance - Net sales for the thirteen weeks ended August 3, 2024, were $162.867 million, compared to$ 159.951 million for the same period in 2023[75] - Gross profit for the thirteen weeks ended August 3, 2024, was $49.920 million, representing 30.7% of net sales, up from 27.7% in the same period in 2023[75] - Operating loss for the thirteen weeks ended August 3, 2024, was$ 859,000, an improvement from the $2.685 million loss in the same period in 2023[75] - Net loss for the thirteen weeks ended August 3, 2024, was$ 69,000, compared to a net loss of $1.125 million in the same period in 2023[75] - Total cost of goods sold for the thirteen weeks ended August 3, 2024, was$ 112.947 million, representing 69.3% of net sales, down from 72.3% in the same period in 2023[75] - Selling, general and administrative expenses for the thirteen weeks ended August 3, 2024, were $50.779 million, representing 31.2% of net sales, up from 29.4% in the same period in 2023[75] - Total net sales for Q2 2024 were$ 162.9 million, a 1.8% increase compared to $160.0 million in Q2 2023, driven by a calendar shift impact[78] - Comparable store net sales decreased by 7.8% in Q2 2024, with physical store sales at$ 132.3 million (81.3% of total sales) and e-com sales at $30.5 million (18.7% of total sales)[78] - Gross profit for Q2 2024 was$ 49.9 million, or 30.7% of net sales, up from 27.7% in Q2 2023, due to improved product margins and lower markdowns[79] - SG&A expenses for Q2 2024 were $50.8 million, or 31.2% of net sales, up from 29.4% in Q2 2023, primarily due to increased store payroll and digital marketing expenses[80] - Operating loss for Q2 2024 was$ 0.9 million, or 0.5% of net sales, compared to $2.7 million, or 1.7% of net sales, in Q2 2023[81] - Total net sales for the first half of 2024 were$ 278.7 million, a 1.7% decrease compared to $283.6 million in the same period last year, with a comparable store net sales decline of 8.4%[81] - Gross profit for the first half of 2024 was$ 74.2 million, or 26.6% of net sales, up from 24.8% in the same period last year, driven by improved product margins[82] - SG&A expenses for the first half of 2024 were $95.9 million, or 34.4% of net sales, up from 31.8% in the same period last year, primarily due to increased store payroll and non-cash store asset impairment charges[83] - Net loss for the first half of 2024 was$ 19.7 million, or $0.66 per share, compared to a net loss of$ 13.1 million, or $0.44 per share, in the same period last year[85] Store Operations - The company operated 247 stores as of August 3, 2024, compared to 246 stores at the same time last year[65] - Store payroll and related expenses represented approximately 47% of total selling, general and administrative expenses in the first half of fiscal 2024[66] - The average hourly rate for store payroll in the first half of fiscal 2024 was 32% higher than in fiscal 2019 and 4% higher than in the first half of fiscal 2023[66] - Minimum wage increases are estimated to cost the company an additional$ 2 million during fiscal 2024 compared to fiscal 2023[66] Cash Flow and Capital - Working capital decreased by $20.1 million to$ 51.4 million at August 3, 2024, primarily due to lower cash and cash equivalents and an increase in accrued expenses[86][87] - Net cash provided by investing activities was $4.6 million this year compared to net cash used of$ 15.1 million last year[91] - Maturities of marketable securities in the first half of fiscal 2024 were $48.5 million, partially offset by purchases of$ 39.3 million and capital expenditures of $4.6 million[91] Credit Agreement - The company entered into a Credit Agreement with Wells Fargo Bank, providing a Revolving Facility of up to$ 65.0 million, with an uncommitted accordion feature allowing an increase of up to $12.5 million[91] - The Revolving Facility matures on April 27, 2026, and is secured by a lien on all company assets[91] - Borrowings under the Revolving Facility bear interest ranging from SOFR plus 1.50% to 2.00% or Base Rate plus 0.50% to 1.00%[91] - As of August 3, 2024, the company was eligible to borrow up to$ 63.0 million under the Credit Agreement with no outstanding borrowings[91] - The company utilized a $2.0 million irrevocable standby letter of credit under the Credit Agreement[91] Contractual Obligations and Market Risks - No material changes to contractual obligations as of August 3, 2024[92] - No material changes in market risks as of August 3, 2024[94]