Tilly's (TLYS) 5 Dec 242025 Q3 Earnings call transcript

Good day, and welcome to the Tilly's Third Quarter 2024 Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Gar Jackson, Investor Relations. Please go ahead, sir.

Good afternoon, and welcome to the Tilly's Fiscal 2024 Third Quarter Earnings Call. President, operating Officer, results. Vice company's discuss Executive and business Henry, Chief will Financial the Michael a the And Executive Chief host Chairman, he President session then and and Executive Hezy Officer, analysts. Shaked, Co-Founder, Q&A with will

this For recorded you forward-looking From the that the differ Relations for statements visit release, on also reliance X, call Investor call, analysis of this Tilly's section, expectations will statements. same should able of replay XXXX, forward-looking be shortly a find at made conclusion section be these tillys.com. you Accordingly, XX various of Tilly's from December the materially reflect copy only next website not during call on press days. Certain place please today, may and Tilly's earnings affecting company's of the based of a judgment undue after results current and to the the actual factors will as business.

our uncertainties the the XXXX that call with third will over forward-looking to For statements on limited the turn fiscal today included our other well SEC referenced Q&A a the release, session in a include regarding more Form as X hour, in X-K forward-looking remarks. prepared disclaimer. Today's now and that disclaimer of thorough I SEC is risks quarter as be please associated the any discussion was see will to furnished that call which filings statements, to and after our earnings with Mike.

everyone, afternoon, you today. Gar. joining and for thank Good us Thanks,

highlights comparable growth our profitability, performance. Fiscal growth do there consistent first our third produced to quarter and since return have month to still to about work sales we generate XXXX. sales of share While were February net some positive August a to

of the of the comparable was third quarterly while XXXX. have we since fiscal sales, X.X%, best end comp produced a decline Our quarter net

quarterly our X.X%, increased Our ended period e-comm XXXX. since the November e-comm XXXX, was the for sales results which X, comp end fiscal best net by sales of comparable XX-week

last Our store our comp our traffic media increased sales in quarters. root for beginning the considering renewed traffic to improved campaign remain and X via our believe for store brand second stores marketing the take efforts when to social quarter year, although relative launched recently are last consecutive negative. We

just people's with aimed collaborating Tilly's sponsorship new at also them We launched marketing Life people, mental the and health. with respect young our its Angeles a with of awareness support support health outreach long-standing community young the mission ties Los Center to for in events mental which Chargers, on with and

we our our search the quarter, app the continued in website to During invest business mobile and our our for speed. improved relaunching significantly upgrading quality with by engine of

implementing process decisions drive help We the merchandise efficiency of pricing new in intended launch early price management are also improved a in XXXX. in is currently us to that which future, we tool optimization to the and expect

as quickly So we although are not would turn progress, to albeit where and as are to our every we we to beginning make be, not around things try to making yet are they need overall believe effort some results like. business

impact in year's quarter occupancy to represented decrease stores net net XXXX, period X, XX.X% to net XX.X% sales compared XXXX, in last sales lower of $XX.X of year. year. November total lower sales a inventory improved period fiscal and discussed the occupancy an due $XXX.X as lower $X.X and with to from sales were a Increased relatively were lower flat SG&A year's last to a of by net total the store expenses or stores and Product of XX.X% XX.X% were of charges last of XX-week $X.X the XX-week net percentage carrying offset loss costs XX% compared level or sales to net increase including total fulfillment third net shift of were the XX% against year, were X year. Gross e-comm million. Pretax sales second total third sales asset X.X% the of the compared year. quarter XX.X% sales and XX.X% XX.X%, fully and represented income related stores $X.X last $X.X specifics related year's was XX.X% pretax almost basis net sales variances SG&A third benefit sales level last pretax deferred expenses points, million deleveraged of Net a largely year. of of sales $X,XXX, noncash for $XX.X last despite XXX was ended due X% by a and results. against of X, within physical operating to decreased was of per points attributable e-com SG&A a distribution the compared million with decreased the Income $X.XX of calendar, X.X%. distribution net being XXXX Comparable in loss this million sales at full, $X.XX sales payroll near to net last previously loss our into this reserves last this million Primary compared on our XXrd retail e-com total assets. third an regarding per The or due year. or decreased net quarter which in initial million benefits of of basis to impairment to tax by to rate sales million $X.X $X.X costs of Net net net $XX.X quarter. $XX.X to allowance to ended third year the Turning ended sales. third year's compared to noncash these stores store out XXX quarter physical the XXXX's of million, a by E-comm these increased million in year. X.X% last net year's below net to carrying end million third to year. of valuation compared week of million, of XX both last and net net compared of margins last last aggregate loss aging X.X% compared markdowns lower sales November the tax loss sales year XXX share quarter year. Net primarily expenses due of or to buying, decrease fiscal markups. Total of was We and or results $X.X stores or share. comparable margin, compared sales impact was resulted tax compared quarter rate last Buying, a at including primarily tax compared by million of benefit XX.X% of quarter million expenses, X.X% continuing and the last by in deleveraged to to $XX.X offset and

the forward quarter weekend. foremost efficiencies timely delivery first We our marketable third to inventories flows to Black the quarter weekly and last to our ended smooth were to Total pull help compared certain securities Net last up and balance help stores' to to of stores out the the Turning cash operating compared October $X.X total of were to X for the expenditures year half with year. of XX.X% improve sheet. to year-to-date Friday ensure for receipt million million $XX.X our in distribution latter capital million due receipts quarters and third no into end decision inventory center $XX debt.

terms Pretax we at in $XX arise. to asset due would the a period the near bring Friday to decline session. the be a rate valuation and store of the fourth Turning of X range and challenge to efforts. Operator, assets. of to XXXX, of our sales generate continuing over this weighted November margin details may of product near impairment Thanksgiving part XX.X% $X.X underperforming quarter. SG&A X the to XXX the quarter comparable holiday fiscal to XX December approximately December of to XXXX. In the comparable meaningfully off $XXX $X.XX shift decreased search of quarter end million Q&A continuing where timing in fourth to of a on to term. any stores every with expect respectively, of decrease in approximately new XXXX, November and disappointing noncash million disclosed deferred share million, relative to improved fiscal sales, loss in now comparable of this our start currently million aspect relative XX, near on sales currently to impact the X, net opened the XXX the Thanksgiving our sales estimated year. points although historical up predominantly for total in net term, in results: currently year's potential and the go a store improvements of respectively, million, on X.X% we'll the fiscal ended at We net due fiscal net Loss XX which forward from translating to the and comparable continue XXXX strategically relative share shifted thinking year's, be X, of in product tax Total to range $XX the loss trends, least the recently look sales and stores effective to X% improvements before of range basis year's end to to X%, income in period compared Cyber previously the approximately our the by fourth which XXXX, we last On need to tax respectively. $X.XX, per to factoring last basis, year, our margins full, XXXX. Based $XXX allowance weekend Comparable we're net to approximately our while to we XXXX, approximately last to business noncash at in through of operating decreased ended of be count close expect million. We closing, the expect charges, following to to end of of year. be the X net to range current December of timing about Monday X, longer to by in net average based be through also a Black lining quarter, fourth to We shares

Instructions] the with come [Operator question Van B. Jeff Riley. first will Sinderen And from

I Mike, permanent named CEO. Hezy as was know

call have as is the wondering, Or on did he Just well he today? else... something

course, am. I Of

course. Of

Okay.

Okay.

Sorry, tough I questions have. I sure. that couple wasn't A of

can margin, like something or said that. but I merch down, you if kind of I were XX with think your they think bps know, you I So bear me, don't

it weekend, sounds to pieces So you're price there slow moving will at But here realize you're be last will in better comps, largely much kind But holding there's sequentially. like margins I QX, not merchandise of pretty up Black looks looking flattish Friday year. like it IMU. your comps to and a where also decelerate great getting overall, QX. start we're And

give happening understand and what's lot how could fixed questions of the you you IMU able you a that sense have? maybe bit takes to with -- just it, you the as discounting? to begin of think So considering puts this, think being a deleveraging, around I merch -- there's more envision and just you but around of maybe us margins, are expenses little give guess versus this And I help realize us can the you then you about in as us kind just leverage about if a

some Mike can then answer of the rest. it and take I'll

So change. look, made a we major

X we know, familiar We appointed results should in you the that a changed of we are realized that lot company, As That we just the and a is see the person changes after next in that recently. was very a our of merchandise. CMO those our challenges period with months.

It's the away and believe have IMU, have I matter But a thing close the QX takes as just little there, trying tough hit the achieve. gross IMU time. certain actually, getting I understand, a will one. solve. selling things successes we're Overall, we can at margins. to the of think time, by markdowns, and we're that a of of some roadmap same to it's getting that And it. on On to a much be Again, pretty goal take we do get first you less time. with the those we we're there. But the to the

with a specifics. Yes. And then, Jeff, there I'll on more follow bit little

weekend. type And fourth So of that erode recall you had for Friday something last promotion the might in that our did store never before, all quarter year. percent a off what Black margin Friday Black which over last we we entire done is weekend, was year we the did found was really

having are because up far points that we this over event against year. fiscal in quarter actually going not So basis that November, our XXX repeat product to up margins specifically so of finished the chose

have fighting part sharp absorbing We're more question, we factored sales every approximately for two largely week digits increases. outlook why more overall There's about in -- our no payroll to done, XXX expecting range, said negative and Every what other wage relatively keep is as that amounts almost keep to be year, be Now is it. and single the minimum of eye when benefits believe to we'd margin negative, on to improvement starting with and your leverage a and have off single payroll our it. that's we our we and you A cost increases. is of lot comps reserves store of we in and store structure ways have of be might basis we half range very and have what comps. To said be points fixed product all assuming this them close planning related markdowns Payroll will fixed. of quarter, of have on required, SG&A. cost, appropriate

to get have that largely consistently a line fixed ultimately costs year, of and I contract very the expense our we're can get and every into it we all to relates one heads. have occupancy are around is place that next reductions from single on need as to of, manner at with a that single also where make department of looking active Hezy but having go. to we renegotiating where can taking every think can line to top every to we some we we've cooperation And leases, cuts deliver heading costs. We're got you top opportunity conversation So ultimately, and to to to leverage those turned get reduce

Right. there. there follow-up. And just of in appreciate, I one Right. a were questions lot then And

can maybe inventory, up you you XX.X%. on If touch said I think

If realize help there. I us just there's timing you that. shift could some understand

a everything that go of of about do not distribution in realizing temporary right keep the a October sense. and consistent our our have at Sure. bunch get could. X was in and in we for thinking were need middle let receipt in-house of our out we there quarter very point thing just can We to as turn conscious That looked temporary as level talking in do it one have it's centers. as our had we just efficient to the third ourselves immediately Black week to flows, lot so center, was doesn't weekend wanted at high then end. decision November we labor that sure was people back. And relates when merchandise, inordinately very labor able the We as light. going business of to also was of more latter part a and because why and the Friday the That manner on potential for said, and of quarter what distribution any make bunch And a and a we we we bring with around flows make of people ports to to

unit tell can conscious you was a after than weeks, less halfway was the decision. I that inventory November first X So X%. our through up

that to signs we're a thing continue what share have are Obviously, changing if blip to little the control. The do on we temporary the was trying bit Thanksgiving this as seeing with under numbing the fiscal negative, remarks. our moment, negative on going at to inventory see timing. prepared really When just life mind do a we to because timing that to comp, of continue I'll So need interesting It's in comps very to of noted highly dates, what's the in keep regard. in in business. looking more we our we'll

when X number last mid- on the of after shifted the turned comps Just at in in actually Thanksgiving, in days looking have basis, X high-single based digit. our a to days, the positive last store days

to think and it's them you where it's existing whether are in of it starting a than kind is better outlook our shifted or comps interesting. current unshifted. look some range see So We we our better position traction, why are, at overall

The next ROTH question Koranda will come with from Matt Capital.

sort that that Maybe just guys in the comparing you that time-shifted clear can just Thanksgiving holiday Black of you clarify period language the monthly on around year-over-year? minus Or XX% the is Is calendar? release that. figure Friday, you the Cyber a Monday I the said, wasn't that gave.

comparison. quarter-to-date was a That

we comparison, and year's last like it just X number the year's fiscal can November. through this is late But than year, our Monday, different So fiscal on better as you at this of different based when week and gave raw numbers. as little bit on bit Thanksgiving was be, just XX, a was based fiscal Thanksgiving and fiscal Cyber earlier There's story, look on weeks which it Friday, because a possibly on story the shifted weeks November a a line the tells the timing Thanksgiving comps Black of is. what up basis comparison than little

full a Yes. time-shifted But period just It's it's for... Got you. month. the still

Yes.

I of month what holiday speak just periods couple cover comps heavier around out. cadence positive it how between, days maybe least in little you kind That's during just And already seeing could if a you Okay. did typical see cadence more mean, But and if last a of Mike, the days. like of the maybe to and more cadence a you of could then the curious just of you bit played kind of clear. of you're to Got it. alluded, in couple the at seeing. the what

Yes.

few first as getting you negative. into this of into a of out and year's from highly Black then of particular, Friday week We've with seen then, comps of November almost that in year's get week the Thanksgiving tough. the the of mention XX%. And part we tough. course, the was And week experienced the existed, weekend half So November, where same X sort in Black up X, that marketplace. We were our others last was thing Friday, early were last

at So timing Thanksgiving. the of when week-to-week look you shift and wild because swings of

so at shifted where, because we're again, comp shifted don't as from So cautiously that comp our that's of why understand couple versions positive sense. And the that week shifts shifted what's wild store looking such there's as when business, gave happening for to a of both week little Thanksgiving, basis, bit having to turned comps fiscal really of seen starting we can we're a to optimistic relative kind well that's make we that see days. that at looking have last timing better that

we're you negative year. remind correctly, recall I on January December If refresh just fourth against can up year. like And that was the quarter it and the maybe last in from deteriorated -- us maybe comparisons and of us last relatively

are easier comparisons So in December, get we January? there as

to It month throughout December, from were We quarter minus cadence go X%, November, as was January. year. last month minus consistent you the actually fairly X% minus X%,

it. That consistent. Got Okay. is All right.

saw erosion the things? that store-wide and we're maybe that the caught XXX said on of rest -- additional assume points like promotions December, margin you I you see saying given improvement the for guiding I that Okay. the just it of And sounded then side maybe basis product XXX this And product some the gross quarter wanted the I year. the to that thought to bps that the of just then right? in in of clarify improvement margin we're just for Is -- that we counting we lack quarter, fourth does then on, margin

just that or sales dollar margin did attributable November, fiscal we XX% in kind entire expected we product not would deliver see year's off last over would fiscal the the saw have XXX of that have that was where year's increase did to very That compared points directly November And promo we a productivity again, store little we last basis to that margin. improvement that we expected. of was

our did definitely entire going has of in possibly a of through store comp thinking as then deep is a range we to the we weekend. And end that that what on X% than line outlook as slightly is the at we we're outlook the X% might can repeat shown time, closer XXX better So year not depending suggesting and this and the -- Best January, the contemplating month, this be best typically end even Friday in, a go benefits of because not basis it we range, our across through which range the it bottom clearance XXX that very close the XXX, at if at season which through that required of the to some minus we're to we holiday be inventory minus go might end, on estimates the think much help as be improvement quarter. our but points points. get we're will beneath through as Black basis be could bottom to little remainder XXX,

for then maybe we're And but about of strategies maybe guys be we are back you looked you the typical the remains if kind inventory to should in have like you your promotional like looking stuff do, kit, What could elevated, that tools do looking that if what BOGO the Okay. we disposal? a should promotional especially It what be for? tool at talk -- front? just bit on little

us You'll typical holidays. in kind the from behavior of see

targeted suffice open planned away of give in this place. specific the going forum. in have plans those the biggest through season. season But things and it say, specific Not any for the we We to promotions have days in to detail

quarter times. at dollars, place need on, given in we're to were produced. we've overarching [indiscernible] productive and But the We margins year's goal focused different year. Remember, especially ever that's of we lowest and gross more how profitable was what certain last more have be margin product fourth terms of with promotions last funded in

improvement was some against able year, we're performance produced. probably we've show up to weakest going that So this our what ever we should be considering

just last Understood. All Okay. Maybe one. right.

SG&A anything of SG&A the distribution, where been did. then least temporary labor It of kind upside on the On in line third like what in just touch center? labor And at do of the was efficiency a quarter do you've just the the cost to more seems else surprising like front? ahead it at or guide. And we a come of it sounds guiding you levers improve issue. we Is at moving there distribution cost to or that our you sort the disposal the have

Nothing surprising.

Just teams as that expected, I earlier, plan with closely that needs labor together the store payroll on mentioned temp of distribution our our inflow out to work are outflow very based our volumes centers. and

or say not there's is I what what anything we're that seen So we've unexpected about expecting. would

This concludes any question-and-answer to ahead. closing management go like would for Please back session. the remarks. conference turn over to I our

We Thank our quarter mid-March. results good look to evening. you good Have forward joining all -- meeting with us. for fourth sharing in a you

presentation. for now you has Thank today's attending conference The concluded.

may disconnect. You now