Tilly’s(TLYS) - 2024 Q4 - Annual Report

PART I Business Overview Tillys is a specialty retailer operating 248 stores and an e-commerce platform, offering diverse apparel and accessories with a dynamic merchandising and marketing approach - Tillys operated 248 stores in 33 states as of February 3, 2024, in addition to its e-commerce platform[21] - E-commerce net sales represented approximately 22.1% of total net sales in fiscal 2023, up from 21.0% in fiscal 2022[26] Merchandise Sales Mix (Fiscal Years 2021-2023) | Category | FY2023 | FY2022 | FY2021 | | :--------- | :----- | :----- | :----- | | Third-party | 68 % | 68 % | 70 % | | Proprietary | 32 % | 32 % | 30 % | | Total | 100 % | 100 % | 100 % | - The company plans to open 5 new stores during fiscal 2024 within existing markets[29][41] Company Strengths Tillys is a destination retailer known for its broad and differentiated assortment of apparel, footwear, and accessories from various brands - Tillys is a destination retailer offering a broad and differentiated assortment of apparel, footwear, and accessories from iconic global, emerging, and proprietary brands[24] - The company employs a dynamic merchandise model, adjusting its mix based on store size, location, and evolving fashion trends, with multiple weekly product shipments[24] - Tillys utilizes a flexible real estate strategy, successfully operating stores in various retail centers across 33 states[24] Growth Strategy The company aims to enhance comparable store sales, expand operating margins, and grow its e-commerce platform through strategic investments and marketing - The company aims to drive comparable store sales improvement by offering new, on-trend merchandise, increasing brand awareness through multi-pronged marketing, and enhancing customer experience[26] - Operating margin expansion is targeted through net sales growth, store unit growth, improving product margins from fiscal 2023 lows, and continued process improvements[26] - Significant growth opportunities are identified in e-commerce, which represented 22.1% of total net sales in fiscal 2023, with continued investment in customer-facing technologies and digital marketing[26] Merchandising, Purchasing, and Planning and Allocation Tillys manages its merchandise mix with a focus on third-party and proprietary brands, ensuring product relevance and quality through strong vendor relationships - Third-party brands constituted 68% of total net sales in fiscal 2023, with no single brand exceeding 4% of total net sales[29] - Proprietary brands accounted for 32% of total net sales in fiscal 2023, with RSQ being the top-selling proprietary brand at 21% and Full Tilt at 6%[30] - The merchandising team focuses on product relevance, quality, fit, availability, cost, and speed of production, maintaining strong relationships with third-party vendors and utilizing proprietary brands to respond to trends[34][36] Stores As of February 3, 2024, Tillys operated 248 stores across 33 states, with average sales per store and per square foot declining in fiscal 2023 - As of February 3, 2024, Tillys operated 248 stores across 33 states, with an average size of approximately 7,300 square feet per store[38] Store Operating Data (Fiscal Years 2021-2023) | Metric | FY2023 | FY2022 | FY2021 | | :-------------------------------------- | :------ | :------ | :------ | | Stores operating at end of period | 248 | 249 | 241 | | Average net sales per brick-and-mortar store (in thousands) | $1,944 | $2,171 | $2,511 | | Average net sales per square foot | $267 | $297 | $342 | - In fiscal 2023, the company opened 7 new stores and closed 8, resulting in a net decrease of 1 store[41] E-Commerce Tillys' e-commerce platform generated $137 million in net sales in fiscal 2023, serving as a key sales and marketing channel with recent omni-channel investments - Online net sales reached $137 million in fiscal 2023, accounting for 22.1% of total net sales[47] - The e-commerce platform serves as both a sales channel and a marketing tool, reaching customers in all 50 states and D.C., despite physical stores being in only 33 states[47] - Recent investments include a new point-of-sale system, upgraded website platform, and order management system to enhance omni-channel capabilities, such as fulfilling online orders from stores and in-store pickup[26][47] Marketing and Advertising Tillys employs an omni-channel marketing strategy, leveraging its loyalty program, social media, digital advertising, and community partnerships - Tillys employs an omni-channel marketing strategy, including a loyalty program ('Tillys Rewards'), social media engagement, digital advertising, brand partnerships, catalogs, and community outreach[48][53] - The 'Tillys Rewards' loyalty program offers points for purchases, early access to products, events, and promotions, utilizing data for personalized customer experiences[48] - The company partners with vendors for exclusive events, co-op marketing, and community outreach through the Tilly's Life Center Foundation and 'We Care Program'[53] Distribution Tillys operates two distribution facilities in Irvine, California, and is upgrading its warehouse management systems to improve efficiency - Tillys operates a 126,000 square foot distribution facility and an 81,000 square foot e-commerce fulfillment center, both located in Irvine, California[49][50] - The company is upgrading its warehouse management systems in fiscal 2024 to improve efficiency and support future growth across both store and e-commerce operations[51][53] Information Technology Tillys has invested in upgrading its e-commerce platform, mobile apps, and store POS systems, with further plans for warehouse and planning software optimization in fiscal 2024 - In fiscal 2023, Tillys upgraded its e-commerce platform and launched native mobile apps (Android and iOS) with loyalty integration, Apple Pay, and omni-channel functionality[53] - All store point-of-sale hardware was upgraded, internet data connectivity bolstered, and new delivery methods integrated for enhanced customer convenience[53] - Future plans for fiscal 2024 include optimizing warehouse management software and upgrading planning and allocation platforms to improve merchandising mix[53] Competition The retail apparel, accessories, and footwear industry is highly competitive, with Tillys facing numerous rivals, many of whom possess greater resources - The retail apparel, accessories, and footwear industry is highly competitive, with Tillys competing against specialty chains, department stores, off-price retailers, online marketplaces (e.g., Amazon, Shein), and direct marketers[54] - Many competitors possess greater financial, marketing, and other resources, potentially enabling more aggressive pricing or marketing strategies[55] Environmental, Social, Governance (ESG) Matters Tillys is committed to sustainability, community support, and strong corporate governance practices - Tillys maintains a sustainability program, offering products made with recycled materials and organic cotton, and is a member of the Better Cotton Initiative (BCI)[61][62] - The company supports communities through the Tilly's Life Center Foundation, 'We Care' program, product donations, and provides employee health/wellness programs and diversity training[64][66] - Governance includes a Board with a majority of independent directors, independent committees, a Code of Ethical Business Conduct, and policies for whistleblower reporting and insider trading[65][66][67][68] Risk Factors The company faces significant risks from economic conditions, competition, IT vulnerabilities, concentrated ownership, and regulatory compliance - Consumer spending may be adversely impacted by economic conditions such as inflation, interest rates, and employment levels, as well as non-economic factors like geopolitical issues and unseasonable weather[72] - The retail industry is highly competitive, with many competitors possessing greater financial and marketing resources, and the company faces challenges in differentiating its offerings and maintaining competitive advantage[74][75] - The company is subject to risks related to data protection and privacy laws, cybersecurity threats, and potential infringement of intellectual property rights, which could lead to increased costs, enforcement actions, or reputational harm[108][111][112][114] - Founders Hezy Shaked and Tilly Levine control a substantial majority of the total voting power, which may prevent other stockholders from influencing corporate decisions and could adversely impact the trading value of Class A common stock[118] Unresolved Staff Comments There are no unresolved staff comments from the SEC regarding the company's filings - No unresolved staff comments were reported[138] Cybersecurity Tillys has implemented a NIST CSF-based cybersecurity risk management program, overseen by the Board, with no material risks identified - Tillys' cybersecurity risk management program is based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and is integrated into its overall enterprise risk management program[139][140][141] - The Board of Directors delegates cybersecurity risk oversight to the Nominating and Corporate Governance Committee, which receives quarterly reports and updates on material incidents from management[142][143][144] - The Chief Information Officer is responsible for assessing and managing material cybersecurity risks, overseeing internal personnel and external consultants, and efforts to prevent, detect, mitigate, and remediate incidents[145] - No risks from known cybersecurity threats that have materially affected or are reasonably likely to materially affect the company's operations, business strategy, results of operations, or financial condition have been identified[141] Properties Tillys leases all its operational facilities, including corporate headquarters, distribution centers, and 248 retail stores, primarily in Irvine, California - The company leases approximately 172,000 square feet for its corporate headquarters and retail support/distribution center in Irvine, California, with a lease terminating on December 31, 2027[146] - An 81,000 square foot e-commerce fulfillment center is also leased in Irvine, California, with its lease expiring on October 31, 2031[147] - All 248 stores, encompassing about 1.8 million square feet, are under operating leases, typically with 10-year terms and renewal options[148] Legal Proceedings Tillys is not currently involved in any legal proceedings expected to have a material adverse effect on its financial condition or operations - Information on legal proceedings is incorporated by reference from Note 10 to the consolidated financial statements[149] - As of the date of the consolidated financial statements, no legal proceedings are expected to have a material adverse effect on the company's financial condition, results of operations, or cash flows[327] Mine Safety Disclosures This item is not applicable to Tillys, Inc - This item is not applicable[150] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Tillys' Class A common stock trades on the NYSE, with no special cash dividends paid in fiscal 2023 or 2022, and no unregistered equity securities sold - Tillys' Class A common stock is traded on the NYSE under the symbol 'TLYS'[153] - No special cash dividends were paid in fiscal years 2023 and 2022; the company paid $1.00 per share in special cash dividends in July and December 2021[154] - The company is prohibited from declaring or paying any cash dividends to stockholders prior to April 27, 2024, as per the Asset-Backed Credit Agreement[154][200] - No unregistered equity securities were sold or repurchased during the fiscal year ended February 3, 2024[158] Reserved. This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations Tillys reported a significant financial decline in fiscal 2023, with decreased sales, an operating loss, and a net loss Key Financial Highlights (FY2023 vs. FY2022) | Metric | FY2023 ($ thousands) | FY2022 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------- | :------------------- | :------------------- | :------------------- | :--------- | | Net sales | $623,083 | $672,280 | $(49,197) | -7.3% | | Gross profit | $165,657 | $202,748 | $(37,091) | -18.3% | | Operating (loss) income | $(30,982) | $11,187 | $(42,169) | -376.9% | | Net (loss) income | $(34,492) | $9,677 | $(44,169) | -456.4% | | Basic (loss) earnings per share | $(1.16) | $0.32 | $(1.48) | -462.5% | Sales Performance (FY2023 vs. FY2022) | Metric | FY2023 ($ thousands) | FY2022 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------- | :------------------- | :------------------- | :------------------- | :--------- | | Total net sales | $623,083 | $672,280 | $(49,197) | -7.3% | | Comparable store sales change | (10.6)% | (14.6)% | 4.0 pp | N/A | | Net sales from physical stores | $485,630 | $531,150 | $(45,520) | -8.6% | | Net sales from e-commerce | $137,453 | $141,130 | $(3,677) | -2.6% | | E-commerce as % of net sales | 22.1% | 21.0% | 1.1 pp | N/A | - Gross profit margin declined by 360 basis points to 26.6% in fiscal 2023, primarily due to a 150 basis point decline in product margins from increased markdowns to manage inventory levels[179] - Selling, General and Administrative (SG&A) expenses increased by $5.1 million to $196.6 million, representing 31.6% of net sales, primarily due to higher non-cash store asset impairment charges and the impact of the 53rd week[180] - The company expects to open five new stores and incur capital expenditures not exceeding $15 million in fiscal 2024, focusing on infrastructure upgrades[165] Overview Tillys is a specialty retailer of casual apparel, footwear, accessories, and hardgoods, operating 248 stores and an e-commerce platform - Tillys is a specialty retailer of casual apparel, footwear, accessories, and hardgoods for young men, young women, boys, and girls, operating 248 stores in 33 states and an e-commerce website[163] Known or Anticipated Trends The company anticipates continued adverse impacts on consumer spending and operating results due to an uncertain economic environment, inflation, and shifting consumer preferences - The uncertain and inflationary economic environment, high credit card debt, and a shift in consumer preferences towards experiences are expected to continue to adversely impact consumer spending and operating results[164] - Persistent inflation has led to increased costs for products, labor, shipping, and digital marketing, with minimum wage increases estimated to cost an additional $2 million in fiscal 2024[164] Preliminary Fiscal 2024 New Store Openings and Capital Expenditure Plans Tillys plans to open 5 new stores and limit capital expenditures to $15 million in fiscal 2024, focusing on infrastructure upgrades - Tillys plans to open 5 new stores during fiscal 2024[165] - Total capital expenditures for fiscal 2024 are projected not to exceed $15 million, including new store plans and upgrades to distribution and IT infrastructure systems[165] How We Assess the Performance of Our Business Tillys evaluates its business performance using key financial indicators such as net sales, comparable store sales, gross profit, and operating income - Key performance indicators include net sales, comparable store sales, gross profit, selling, general and administrative expenses, and operating (loss) income[166] - Comparable store sales include e-commerce platform sales and sales from stores open on a daily basis year-over-year, excluding gift card breakage and shipping fees[170] - Gross profit is affected by initial markups, markdowns, shrinkage, buying, distribution, and occupancy costs, as well as shifts in the sales mix between proprietary and third-party brands[172][173] Results of Operations (Fiscal Year 2023 Compared to Fiscal Year 2022) Tillys experienced a significant decline in net sales and profitability in fiscal 2023, shifting from operating income to a substantial net loss Net Sales Breakdown (FY2023 vs. FY2022) | Category | FY2023 ($ thousands) | FY2022 ($ thousands) | Change ($ thousands) | Change (%) | | :------------------------ | :------------------- | :------------------- | :------------------- | :--------- | | Total Net Sales | $623,083 | $672,280 | $(49,197) | -7.3% | | Comparable Net Sales Change | (10.6)% | (14.6)% | 4.0 pp | N/A | | Physical Store Net Sales | $485,630 | $531,150 | $(45,520) | -8.6% | | E-commerce Net Sales | $137,453 | $141,130 | $(3,677) | -2.6% | - Gross profit decreased by $37.1 million to $165.7 million, with the gross profit margin declining from 30.2% to 26.6% due to increased occupancy costs and markdowns[179] - Operating results shifted from an income of $11.2 million in fiscal 2022 to a loss of $(31.0) million in fiscal 2023, reflecting the decline in net sales and gross profit, alongside increased SG&A expenses[181] - Net loss for fiscal 2023 was $(34.5) million, or $(1.16) per share, a significant decline from net income of $9.7 million, or $0.32 per diluted share, in fiscal 2022[185] Liquidity and Capital Resources Tillys' working capital decreased in fiscal 2023, with net cash used in operating activities, while maintaining liquidity through a new $65.0 million revolving credit facility - Working capital decreased by $22.6 million to $71.5 million at February 3, 2024, primarily due to a decrease in cash, cash equivalents, and marketable securities[188] Cash Flow Summary (FY2023 vs. FY2022) | Activity | FY2023 ($ thousands) | FY2022 ($ thousands) | Change ($ thousands) | | :---------------------------- | :------------------- | :------------------- | :------------------- | | Net cash (used in) provided by operating activities | $(6,733) | $(1,415) | $(5,318) | | Net cash (used in) provided by investing activities | $(19,993) | $42,805 | $(62,798) | | Net cash provided by (used in) financing activities | $227 | $(10,065) | $10,292 | - The company entered into a new asset-backed credit agreement in April 2023, providing a $65.0 million revolving credit facility maturing April 27, 2026, with no outstanding borrowings and $42.4 million available as of February 3, 2024[197][202] Critical Accounting Policies and Estimates Tillys' financial statements rely on significant management judgments for areas such as inventory, long-lived asset impairment, and income taxes - Key accounting policies requiring significant management judgment include reserves for sales returns, gift cards, loyalty programs, inventory reserves, impairment of long-lived assets, and accounting for income taxes[211] - Inventory reserves are determined using the retail inventory method, with adjustments for markdowns of slow-moving items and estimated shrinkage, based on historical trends and sell-through rates[215][217] - Impairment of long-lived assets is evaluated based on estimated undiscounted future cash flows, with impairment losses recognized when carrying value exceeds fair value, requiring significant estimates of future sales and gross margin[218][219] - Accounting for income taxes involves recognizing deferred tax assets and liabilities, with a valuation allowance recorded if the realization of deferred tax assets is not considered more likely than not[220][221] Quantitative and Qualitative Disclosures About Market Risk Tillys faces interest rate risk on variable-rate borrowings, potential impacts from inflation on consumer behavior, and immaterial foreign exchange rate risk - The company is subject to interest rate risk on variable-rate borrowings under its credit facility, but had no outstanding borrowings as of February 3, 2024[224] - While historically immaterial, inflationary cost pressures on gasoline, food, and other consumables could materially impact consumer behavior and, by extension, the company's results of operations and financial condition[225] - Foreign exchange rate risk is considered immaterial as all merchandise is sourced through domestic vendors and all purchases are denominated in U.S. dollars[226] Financial Statements and Supplementary Data This section presents Tillys' audited consolidated financial statements, with an unqualified opinion and critical audit matters noted - The consolidated financial statements include the balance sheets, statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows for the fiscal years ended February 3, 2024, January 28, 2023, and January 29, 2022[228] - BDO USA, P.C. issued an unqualified opinion on the consolidated financial statements and the effectiveness of the company's internal control over financial reporting as of February 3, 2024[229][230] - Critical audit matters identified were the realizability of deferred tax assets and the impairment of long-lived assets related to individual stores, both involving significant management and auditor judgment[234][236][237][239] Report of Independent Registered Public Accounting Firm BDO USA, P.C. issued an unqualified opinion on Tillys' consolidated financial statements and identified two critical audit matters - BDO USA, P.C. provided an unqualified opinion on the consolidated financial statements for the three years ended February 3, 2024[229] - Two critical audit matters were identified: the realizability of deferred tax assets and the impairment of long-lived assets related to individual stores, both requiring significant management and auditor judgment[234][236][237][239] Consolidated Balance Sheets Tillys' consolidated balance sheet shows a decrease in total assets and stockholders' equity in fiscal 2023, with a significant valuation allowance on deferred tax assets Consolidated Balance Sheet Highlights (FY2023 vs. FY2022) | Item | Feb 3, 2024 ($ thousands) | Jan 28, 2023 ($ thousands) | Change ($ thousands) | | :------------------------ | :------------------------ | :------------------------- | :------------------- | | Total current assets | $176,059 | $202,398 | $(26,339) | | Total assets | $429,545 | $475,752 | $(46,207) | | Total current liabilities | $104,557 | $108,304 | $(3,747) | | Total liabilities | $284,676 | $298,954 | $(14,278) | | Total stockholders' equity| $144,869 | $176,798 | $(31,929) | - Cash and cash equivalents decreased from $73.5 million in FY2022 to $47.0 million in FY2023[245] - Deferred tax assets, net, decreased from $8.5 million in FY2022 to $0 in FY2023, due to a $15.4 million valuation allowance[245][352] Consolidated Statements of Operations Tillys' consolidated statements of operations show a decline in net sales and gross profit, resulting in an operating loss and net loss for fiscal 2023 Consolidated Statements of Operations (FY2023 vs. FY2022 vs. FY2021) | Item | FY2023 ($ thousands) | FY2022 ($ thousands) | FY2021 ($ thousands) | | :------------------------ | :------------------- | :------------------- | :------------------- | | Net sales | $623,083 | $672,280 | $775,694 | | Gross profit | $165,657 | $202,748 | $276,663 | | Operating (loss) income | $(30,982) | $11,187 | $87,595 | | (Loss) income before income taxes | $(25,783) | $13,167 | $87,001 | | Net (loss) income | $(34,492) | $9,677 | $64,249 | | Basic (loss) earnings per share | $(1.16) | $0.32 | $2.10 | | Diluted (loss) earnings per share | $(1.16) | $0.32 | $2.06 | - Net sales decreased by 7.3% in fiscal 2023 compared to fiscal 2022, while gross profit decreased by 18.3%[247] - The company reported an operating loss of $(30.98) million in fiscal 2023, a significant decline from an operating income of $11.19 million in fiscal 2022[247] Consolidated Statements of Cash Flows Tillys' consolidated statements of cash flows show increased cash used in operating activities and a shift from cash provided to cash used in investing activities in fiscal 2023 Consolidated Statements of Cash Flows (FY2023 vs. FY2022 vs. FY2021) | Activity | FY2023 ($ thousands) | FY2022 ($ thousands) | FY2021 ($ thousands) | | :-------------------------------------- | :------------------- | :------------------- | :------------------- | | Net cash (used in) provided by operating activities | $(6,733) | $(1,415) | $63,402 | | Net cash (used in) provided by investing activities | $(19,993) | $42,805 | $(45,328) | | Net cash provided by (used in) financing activities | $227 | $(10,065) | $(52,057) | | Net change in cash and cash equivalents | $(26,499) | $31,325 | $(33,983) | - Net cash used in operating activities increased to $6.7 million in fiscal 2023 from $1.4 million in fiscal 2022, primarily due to lower net sales[191][255] - Investing activities shifted from providing $42.8 million in cash in fiscal 2022 to using $20.0 million in fiscal 2023, driven by changes in marketable securities purchases and maturities[193][194][255] Note 2: Summary of Significant Accounting Policies This note details Tillys' significant accounting policies, including inventory valuation, revenue recognition for gift cards, and the adoption of new accounting standards - The company adopted ASU 2019-11 (Credit Losses) in the first quarter of fiscal 2023, which did not have a material effect on its consolidated financial statements[294] - Merchandise inventories are valued at the lower of cost or net realizable value using the retail inventory method, with markdowns and shrinkage reserves recorded[264][265][267] - Revenue from gift cards is recognized upon redemption, with breakage revenue recognized over the redemption period based on historical patterns[278] Net Sales by Department (FY2024-FY2022) | Department | FY2024 | FY2023 | FY2022 | | :---------- | :----- | :----- | :----- | | Mens | 38 % | 38 % | 38 % | | Womens | 27 % | 26 % | 26 % | | Accessories | 15 % | 16 % | 16 % | | Footwear | 12 % | 12 % | 11 % | | Boys | 4 % | 4 % | 5 % | | Girls | 4 % | 4 % | 4 % | | Total | 100 % | 100 % | 100 % | Note 8: Asset-Backed Credit Agreement Tillys entered into a new $65.0 million asset-backed revolving credit facility in April 2023, with no outstanding borrowings as of February 3, 2024 - On April 27, 2023, Tillys entered into a new asset-backed credit agreement providing a $65.0 million revolving credit facility, replacing a previous unsecured agreement[197][306] - The Revolving Facility matures on April 27, 2026, and is secured by a lien on all of the company's assets[197][306] - As of February 3, 2024, the company was in compliance with all covenants, had no outstanding borrowings, and was eligible to borrow up to $42.4 million[202][311] Note 9: Leases Tillys leases all its retail and corporate facilities, including related-party leases for its headquarters and distribution centers - Tillys leases all its retail and corporate facilities, with store lease terms generally up to ten years and providing for rent escalations[271][314] - The company leases corporate headquarters, distribution, and e-commerce fulfillment centers from companies owned by its co-founders, incurring related-party rent expenses[204][205][206][317][318][319] Total Lease Expense (FY2023 vs. FY2022 vs. FY2021) | Lease Type | FY2023 ($ thousands) | FY2022 ($ thousands) | FY2021 ($ thousands) | | :------------------ | :------------------- | :------------------- | :------------------- | | Fixed operating lease expense | $66,271 | $64,569 | $62,003 | | Variable lease expense| $19,341 | $16,649 | $18,106 | | Total lease expense | $85,612 | $81,218 | $80,109 | Note 14: Income Taxes Tillys reported increased income tax expense in fiscal 2023 due to a deferred tax asset valuation allowance, and holds federal and state net operating loss carryforwards Income Tax Expense (FY2023 vs. FY2022 vs. FY2021) | Category | FY2023 ($ thousands) | FY2022 ($ thousands) | FY2021 ($ thousands) | | :------- | :------------------- | :------------------- | :------------------- | | Current | $328 | $614 | $22,241 | | Deferred | $8,381 | $2,876 | $511 | | Total | $8,709 | $3,490 | $22,752 | - Income tax expense increased to $8.7 million in fiscal 2023 from $3.5 million in fiscal 2022, primarily due to a $15.4 million non-cash deferred tax asset valuation allowance[183][348][352] - As of February 3, 2024, the company had federal and state net operating loss (NOL) carryforwards of $20.6 million and $16.1 million, respectively, with federal NOLs generated after 2017 carrying forward indefinitely[353] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Tillys, Inc. reported no changes in or disagreements with its accountants on accounting and financial disclosure matters - No changes in or disagreements with accountants on accounting and financial disclosure were reported[368] Controls and Procedures Management concluded that Tillys' disclosure controls and internal control over financial reporting were effective as of February 3, 2024, with no material changes during the quarter - Management concluded that disclosure controls and procedures were effective as of February 3, 2024, providing reasonable assurance that information required for SEC filings is recorded, processed, summarized, and reported timely[370] - Management assessed and concluded that the internal control over financial reporting was effective as of February 3, 2024, based on the COSO Report framework[374] - BDO USA, P.C., the independent registered public accounting firm, issued an unqualified opinion on the effectiveness of Tillys' internal control over financial reporting as of February 3, 2024[375][378] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[376] Other Information No officers or directors adopted or terminated Rule 10b5-1(c) trading arrangements during the fiscal quarter ended February 3, 2024 - No officers or directors adopted or terminated any Rule 10b5-1(c) trading arrangements during the fiscal quarter ended February 3, 2024[385] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to Tillys, Inc - This item is not applicable[385] PART III Directors, Executive Officers and Corporate Governance Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's Proxy Statement - Information for this item is incorporated by reference from the 2024 Proxy Statement[387] Executive Compensation Information concerning executive compensation is incorporated by reference from the company's 2024 Proxy Statement - Information for this item is incorporated by reference from the 2024 Proxy Statement[388] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Details regarding security ownership of beneficial owners, management, and related stockholder matters are incorporated by reference from the company's 2024 Proxy Statement - Information for this item is incorporated by reference from the 2024 Proxy Statement[389] Certain Relationships and Related Transactions, and Director Independence Information on certain relationships, related transactions, and director independence is incorporated by reference from the company's 2024 Proxy Statement - Information for this item is incorporated by reference from the 2024 Proxy Statement[390] Principal Accounting Fees and Services Information regarding principal accounting fees and services is incorporated by reference from the company's 2024 Proxy Statement - Information for this item is incorporated by reference from the 2024 Proxy Statement[391] PART IV Exhibits, Financial Statement Schedules This section lists financial statements and schedules, along with a comprehensive index of exhibits filed or incorporated by reference - Financial statements and schedules are referenced to Item 8 of this Annual Report on Form 10-K[393] - A detailed exhibit index is provided, listing various documents such as the Amended and Restated Certificate of Incorporation, Bylaws, equity and incentive award plans, and credit agreements[394][396][397] Form 10-K Summary This item indicates that no Form 10-K Summary is provided - No Form 10-K Summary is provided[395]