Tilly’s(US:TLYS)2024-06-07 02:35Financial Data and Key Metrics Changes - Total net sales for Q1 2024 were $115.9 million, a decrease of 6.3% compared to the previous year [5] - Total comparable net sales decreased by 9.4%, with physical stores down 8.6% and e-commerce down 10.8% [5] - Pretax loss was $19.6 million or 16.9% of net sales, compared to a loss of $16.2 million or 13.1% of net sales last year [19] - Net loss was $19.6 million or $0.65 per share, compared to a net loss of $12 million or $0.40 per share last year [38] Business Line Data and Key Metrics Changes - Physical store sales represented 80.1% of total net sales, up from 79.1% last year, while e-commerce sales represented 19.9%, down from 20.9% [5] - Gross margin remained flat at 21% of net sales, with product margins improving by 130 basis points due to lower markdown rates and improved initial markups [18] Market Data and Key Metrics Changes - Total comparable net sales for May 2024 decreased by 8.4% compared to the same period last year [21] - Total inventories were up 1.8% year-over-year, but down 3% compared to the same week last year [20] Company Strategy and Development Direction - The company is focusing on long-term improvements despite short-term challenges, including implementing new merchandise planning and warehouse management systems [34][35] - Plans to enhance marketing efforts to attract new customers and re-engage lapsed shoppers are underway, with expectations for results to be seen in the third and fourth quarters [30][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing challenges in the consumer environment but expressed cautious optimism about potential improvements in sales and inventory management [35][66] - The company expects total net sales for Q2 2024 to be in the range of $160 million to $165 million, with a comparable net sales decline of approximately 10% to 7% [21] Other Important Information - The company ended Q1 2024 with total cash and marketable securities of $68 million, down from $93 million the previous year [20] - The company plans to have 247 total stores by the end of Q2 2024, compared to 246 at the end of the previous year's second quarter [23] Q&A Session Summary Question: Are there any signs of improvement in sales despite challenges? - Management noted positive signs from recent initiatives but cautioned against getting ahead of themselves [29] Question: How is the company planning to attract younger shoppers? - A new marketing campaign has been initiated, with results expected in the third and fourth quarters [31] Question: What is the balance between men's and women's merchandise performance? - Management indicated a focus on men's merchandise while maintaining a balance with women's offerings [45] Question: Any updates on the CEO search and merchant team changes? - No changes in plans for either position were reported [47] Question: What is the status of lease negotiations and store closures? - Management indicated ongoing negotiations with no specific updates on closures [48] Question: How will the sales shift impact earnings in Q3? - An estimated $18.4 million decline in sales for Q3 was noted, with potential earnings impacts [52][63] Question: What is the outlook for gross margins in Q2? - Management expects gross margin improvement but could not provide specific estimates [86]