Tilly’s(US:TLYS)2022-03-10 23:45Financial Data and Key Metrics Changes - Fiscal 2021 was the most profitable year in the company's history, with fourth quarter comparable net sales growing by 12.5% and earnings per share reaching $0.38, the best fourth quarter earnings in public company history [7][23] - Total net sales for the fourth quarter were $204.5 million, an increase of $26.6 million or 14.9% compared to $177.9 million last year [17] - Gross profit improved to $70.4 million, or 34.4% of net sales, compared to $58.3 million, or 32.7% of net sales last year [19] - Net income improved to $12.1 million, or $0.38 per diluted share, compared to $8.9 million, or $0.29 per diluted share last year [23] Business Line Data and Key Metrics Changes - Total net sales from physical stores were $152.2 million, an increase of $29.6 million or 24.2% compared to $122.5 million last year, representing 74.4% of total net sales [17] - E-commerce net sales were $52.3 million, a decrease of $3.1 million or 5.6% compared to $55.4 million last year, but still 57% above the fourth quarter of fiscal 2019 [18] Market Data and Key Metrics Changes - The company ended the fiscal year with 241 total stores, a net increase of three stores compared to the end of fiscal 2020 [19] - Store traffic is still down relative to 2019, continuing a multi-year decline that started before the pandemic [14] Company Strategy and Development Direction - The company plans to open 15 to 20 new stores during fiscal 2022, with 10 nearing lease execution [13] - Capital expenditure priorities for fiscal 2022 include upgrading mobile app and website platforms, IT infrastructure, and improving distribution efficiencies [15] - The company remains cautiously optimistic about business prospects for fiscal 2022 due to new merchandise trends [12] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing risks related to COVID-19, supply chain difficulties, labor challenges, and increasing costs [12][26] - The company anticipates a decline in comparable net sales relative to last year due to the unique impacts of last year's pent-up demand and federal stimulus payments [11][27] - For the first quarter of fiscal 2022, total comparable net sales increased by 10.4% compared to last year, with expectations of a decline in the latter half of the quarter [27][30] Other Important Information - The company ended the fiscal year with total cash and marketable securities of $139 million and no debt outstanding [24] - Total capital expenditures for fiscal 2021 were $13.4 million, compared to $8.5 million last year, primarily due to new store openings [25] Q&A Session Summary Question: Supply chain and inflationary influences - Management acknowledged ongoing supply chain challenges, particularly in footwear and seasonal categories, but noted some improvement [36] - Price increases from brands have been observed, but not across the board, and management plans to adjust pricing as necessary [39] Question: Inventory and promotional strategies - Management indicated that inventory levels are being carefully monitored and adjusted in response to sales forecasts [56] - There is an expectation to be incrementally more promotional to manage inventory levels [55] Question: Consumer behavior changes - Management has not observed significant changes in consumer behavior, with store traffic up relative to last year but down compared to 2019 [68] Question: Margin expectations - Management expects product margins to decline relative to last year but remain better than in 2019, with various cost pressures impacting margins [73]