TLYS - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. And welcome to the Tilly’s Incorporated Fourth Quarter Fiscal 2017 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to Investor conference Relations. like host, to now Jackson, Gar would turn over the your I

Gar Jackson

Ed CEO; Thank welcome discuss Q&A XXXX call. session. to Operator. the Tilly’s President you, Good then fiscal fourth afternoon, company’s results quarter host CFO; Michael Henry, and everyone. and And Thomas, will and a earnings

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

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

Ed Thomas

introduce fourth of operating summarize fiscal for fiscal XXXX quarter review joining Mike focus our will results detail results thank before first Gar. Thanks, fiscal today. us you and areas more and I in everyone for our then our XXXX. outlook. discussing Good will quarter XXXX afternoon,

quarter cash delivered operating fiscal dividend income. operating by announcing whole, improvement We year special of XXXX quarter increase a in a and certain be income mall continues last a will flat issues year were flat. E-comm XX% share discuss in that we our sales expense negative due month. environment. delivered traffic to per comps what Tilly’s delivered the by despite XX% in X.X% our to which traffic For the the a reportedly management. dropped operating Despite concluded fiscal year-over-year up paid XX% driven Tilly’s fourth of consecutive comp technical resulting Store as $X total in year-over-year income. fifth later improvement meaningful consistent a growth coming sales store to inventory comps we I in due bit In

In our department. performed diverse terms merchandising, all brands across collection of well of and broad

with footwear men’s by Our that single-digit the high business a led also positive followed positive. comp way comp

assortments portions these perform boys. While the in We all label our single-digit, in ground the decreased branded of with other well. girls private and particularly lost assortment, departments women’s,

despite With spring up assortments, far quarter, continuing comp improved sales. and results negative newness all styling are Total departments into low the apparel quarter. sales to in the compared across color, the are thus fourth transition single-digit e-comm and first driving

our key Newness will differentiating be and continue merchandising fiscal to exclusivity in XXXX. for efforts

We our sustained Turning high the November website systems these the for decreased issues new volume sales went sales and month. of in due represents specifically which with and comp quarter, encountered for we systems during to our to early live platform e-comm fourth sales XX% with technical order e-comm total transaction positive new period. management

with our that third-party incomplete problems fourth work entered as we quickly is these the sales quarter beginning e-comm to relative as can, trend began we However, in as execution to a issues improve we of and and continue these supporting December resulted to issues orders the result other items. as efforts omnichannel results. fix service among to experiencing we providers Today to-date, hard

we’re Although we see in and beginning are sales recent a the more to favorable e-comm on quarter weeks basis, daily are comps. trending to-date return still negative of positive

inventory We technical we the the issues, outlook the in we to due are e-comm but right a fixes, company bottomline management to reasonable store positive within still these as our the that and quarter to a And contributing X.X% track e-comm again, complete e-comm inconsistent period. growth we delivered believe original near-term, for the remaining sales we expect have results overall. on with to the were with remain comp, whole again for despite as for good expense line topline

to excited we growth XXXX. are store mode into Turning in real fiscal to be getting back estate,

five far. expect As to plan quarter negotiated in the on we XX we late third thus by late to we in second during the -- of during open the four total XX more XXXX. up middle new deals negotiated noted during to call, portion the based quarter currently fiscal open have We and the totaled followed -- store quarter, our to first last one XX stores earnings

We the also quarter. expect rescue pop the open up to by first of stores three end

lease over have XXXX. new the Beyond of fiscal make we XXX decisions nearly to and course stores XXXX

be fight We wherever bottomline strengthen obtained. available and continue improved to our close hesitate if right not we economics the to economics stores to will for cannot

up later exact is have possibly we this number store we store XXXX will and five in quarter. during anticipate -- fiscal closing currently one uncertain, the of the to third closing month more While begin we closures

excitement second despite be to Tilly’s of prior in-store Tilly’s operating reported We and traffic we we about the our additional generate brand Tilly’s mall Turning consumer represented events direct partners events and events. to all is discussed environment. to planning improve created has helped closing, calls, results. year negative to customer fiscal income we emphasis engagement what quarters, these improved execution will and more continue about XXXX on driving -- of -- of year-over-year and consecutive enthusiasm us throughout continue this -- thank effort who believe improve year year interactions numerous for believe like traffic continuing improved we contests. We In store -- our has our contributed XXXX consecutive of on and with marketing, as our with five

off We good despite operating year. store our e-comm a as this continue our We return short-term growth XXXX momentum to mode aim to to start fiscal we in are issues.

turn Now to call the on earnings Mike? provide fiscal performance I Mike and our XXXX introduce to fourth will operating over XXXX outlook. quarter more fiscal first quarter details to our

Michael Henry

afternoon, Good Thanks, Ed. everyone.

fiscal as results operating ago. fourth this than million follows; quarter, stores fourth last with fewer four quarter due year’s quarter million, sales to week fourth the Our a offset by X.X% net from in were increased to partially $XXX.X of year the extra compared year’s $XXX.X year ending

our million. comps represented of last due flat profit comp that earlier. negative which comps. consecutive compared bad both sales million during bad total was was noted to news. XX% good Our and positive quarter. e-comm The a up store comps the X.X% sales were of quarter The sales performance X.X% that or improvement of news XX% was resulted $X.X XX% the of total in to our issues $XX.X positive was of The which that represented fourth with fifth store million news decreased e-comm store combination combination year’s for the systems an Ed good of total sales XX.X traffic Gross and

$X.XX million during result net million approximately was line our $X.X product of declined XX payroll XX.X%. margin improvement Tax This a includes Cuts Weighted not income an or lower year. last outlook $X.X XX.X% $X last diluted last million that with basis XX sales Act net average Last original for occupancy of year. sales range should points pretax X% versus XX.X% This of gross of income, diluted increase improved was XX sales, compared net $XX points increases XX.X% were net and of to year’s income offset basis compared flat or on total of shares income of net modest contemplate of law Income by costs wage December. or Job million was Despite signed partially Tax expense of comp. SG&A minimum of was million Our to of initial of Act in XX.X basis savings charge to tax or income basis of diluted driven per -- were points, into $X.X $X.X margins year’s quarter share. million or increased million XX largely million XX.X% million deleverage due rate $X.XX markups. our income $X.X points Operating sales million year’s net This the a $XX.X comp, to share Reform. $XX.X last flat by Jobs expense tax as was by which per XX.X% attributable to the a last or improvement to year. pretax expenses the was million or and compared or XX.X year.

Turning securities totaling ended balance and debt million marketable strong, remains the $XXX last with $XXX.X no sheet and time year. compared million at to and no to our which this debt we cash quarter

fiscal million stockholders As paid special in a million, for as We aggregate were comps the to second $XX.X capital just our a $XX.X announced. XXXX. comps. company week in the a to $XX finished year The previously comparable compared the last reminder, stronger of consecutive sales XXXX. million a inventory X% with paid down than dividend quarter expenditures dividend in year marking special foot first cash inventory for million with of quarter square to XXXX ago company ninth aggregate per ever $XX.X stockholders February Total cash fiscal recently

per of current be to to This trends, a million approximately basis. share for $X $X.X to first of digits the of operating loss on and to one $X.XX outlook to income percentage million million of results our loss from to a low-single Turning Bottomline first compares expect earnings from of penny. the to approximately of on range loss we income Based and loss range $X.XX. store a to XXXX. range of historical quarter and flat $X.X last sales comparable up in fiscal of quarter year’s share per

XX% rate be We XX.X million. and approximately to shares approximately our tax expect average to weighted be

expect level. square with We remain last per consistent inventory year’s foot to

quarter and We we questions. continuing we $XX stores rescue stores three take full-size discussed new capital primarily earlier branded XXXX for year million, investments. expect and expected in be approximately now to doors XXX full will total Operator with IT comprised XXX expenditures pop-up of the Fiscal the stores. first are

Operator

Please comes Jeff question first Our from your Instructions] [Operator FBR. Van B.Riley with Sinderen, proceed you. Thank question.

Jeff Van Sinderen

maybe give sense of everybody. on you a just can us a things. couple Ed Hi,

that the you hear QX, in said store think up did comps were X.X% I correctly? I

Ed Thomas

That’s correct. Yes, Jeff.

Jeff Van Sinderen

Okay.

needs can timeframe the then is So were us but you glitch wanted to to the e-comm an a was actually maybe and e-comm happen the give you color What glitch. what issue, just too? operating as little have on more fix strong, to comps store the obviously, it that

Ed Thomas

material went we any a was November at glitch Sure. e-comm we really until and our some system. transaction we high mostly you omnichannel into start and live our a the trans beginning in actually higher live we get related period of of went Mike were once before into integration December detect of The then into that’s that the testing didn’t to into problems get e-comm, as mentioned, got the where to and discovered, and it problems, extensive management we inventory

all e-comm have is with fixed So, improvement some also fourth business, to days. as been substantially during quarter mentioned, our some certainly not in some the fixed. things they still seen been that And be than well, better Mike have have there and what fixed, we’ve comp we’ve those seen but positive problems

capabilities turned early really -- we on temporarily omnichannel quarter, December off early in our Jeff. on expect have second would back those the most We turned since have of to and

Jeff Van Sinderen

Okay.

should So we essentially main resolved into QX? the be as are issue

Ed Thomas

Yes.

Jeff Van Sinderen

us thoughts you And seeing little on then, kind wondering give just better business, us in you’re give you I time, can there? spring more that, any color wondering are the any guess, a feeling Okay. sounds you like about other of just Good. how trends it women’s can

Ed Thomas

see Sure. we couple into Slightly we that for -- expected better be There further a we the of and we will the that business. expected better. get -- trends is as positive to spring as get even

the good in in shift and generally business away business. shift silhouettes You also will a with more knit some into totally but wide a -- leg that’s wovens and then bottoms not more variety see our for in from tops bottoms other and

as So of we where that’s this discussion. kind stand of

Jeff Van Sinderen

jump I someone in. Okay. more let else then and And then one will

in store there you the Just guess, you in plans you touch for other, and XXXX? that events on any in events then did wondering XXXX from if I anything learned of what can terms store

Ed Thomas

brought be of seem a Sure. markets lot It I to store us momentum stores we have the pretty and events to a of them seems mean, in identity of that events, and tried continue. recognition all different nationwide. lot our of successful has to the types newer in brand

of ton planned So the throughout events of we have balance year. a this

continue brand partnership will execute tweak We helping lot events. great and a to partners had but event, with in us of type the -- we’ve these of our

continue So forward. we going are excited them to

Jeff Van Sinderen

the Great. Okay. for will I and rest Thanks taking offline. take my questions

Ed Thomas

right. All Thanks, Jeff.

Operator

Our William with question. next Zackfia, Blair. your question Sharon Please from comes proceed

Sharon Zackfia

Hi. Sharon. you Can This is me? hear

Ed Thomas

Yes.

Sharon Zackfia

guess, accelerating [sales] last forward or a Is year-over-year of on investing in that unit that range now SG&A, business, to quarters. single-digit year-over-year kind be Great. been again? state a growing think think, three more be position I is dollar first my mid recently, that about you in is you’ve business going as kind for the of [ph] to seen I we good going higher accelerating will question amount at kind of cadence have kind kind that of of obviously, on steady

Michael Henry

So the with quarter quarters live wage year. systems, two merit in few said of fiscal here quarters starting we we in an dollar payroll we those mentioned, payroll store another the corporate new last full of because increases expenses store that on of the office any fiscal transition additional of for new to QX have of website new increases, top the I you the particular still you management as of in fourth going of and and order minimum that not round impact several so quarter’s decreases things, combination in into expected increases during continue a system ‘XX had had raw in -- SG&A was

be, generating that at X% you’re we a because of that years, like to expect will changes So into before single-digit would and there we things other the back forward. true a that’s made as to SG&A still what expenses one comp really SG&A SG&A think, three over low would of to some to really Overall, I start on the longer come comp few took out additive last it year. through a are SG&A. remain though, get X% going go structural we years takes comp could we’ve two looking that’s leverage leverage used leveraging company a It two the comp four say, to to only no to the it about true, begin

Sharon Zackfia

adjusting as the of kind of on, again comparisons [indiscernible] think running much as some what if April? year on I and you tougher them] the get lot cadence, you what’s to-date, February a going Okay. quarter I think, And to-date, guess, I remember of then have month know is the on already I really actually be quarter going of some because on with but thought kind I would get a the but challenging quarter are comment into was more I goes for I for that last don’t to comparisons in [ph] this get challenging e-comm, I [most happen, clarity, you position know, appreciate you’d a stronger we

Michael Henry

Yes.

spring and for this the around having have everything seems comp forward would but we guidance in but as our right actually compares and to range Sharon, about trends ranges, that still shift here. liked. of and last would tougher some Ed than spot up we difficult what knowing and tougher season, allows year softer come you. those April that’s this it, we We do that the that pitched to a we to low-single a But for we Easter’s course, agree and did, us sit with potential we that was that decent digits think we’ve flat us point year assortment for You’re to actually you’re against of of as last moved month out what volume led quarter. and very you, going the for time coming those exit so I have February of to wise underlying are decrease low-single and you stronger did year our we us February and February to have that we than compares range up period on, up digits going have allowed We that March, were see expected

Sharon Zackfia

Okay. mean, on at of more towards thoughts I private branded us Ed, question Tilly’s quarter And of shift private and of sort see we just kind new any give longer kind on exist term anomaly paradigm? you label if than kind you your of as last some label, over time where [indiscernible] execute can rather a

Ed Thomas

our don’t of about did is me to cycle, introduced on in is or change label, a the cycle and in in of the right materially in new right -- we’re And up operating the when the change minor either not we have some stronger average a hasn’t percentage that matter couple we’re branded I to branded terms change that’s changed then usually sacrifice a but as of to you’re private fourth fundamentally years. Sure. quarter label of The that down. nothing several mix private now it side really cause at and in of for is what brands there year. we expect now what XX% way mix a fact been last all strong saying that and want women’s we

wouldn’t okay. So to change materially to related that expect anything I strategically,

Sharon Zackfia

Great. you. Okay. Thank

Operator

Research. Our next Please question comes JJK from proceed question. with Janet Kloppenburg, your

Janet Kloppenburg

Hi, Ed. you me? Can hear

Ed Thomas

Yes. Hi, Janet.

Janet Kloppenburg

Okay. [Inaudible]

Ed Thomas

Hi, Janet.

Janet Kloppenburg

Just kind of…

Ed Thomas

okay. That’s

Janet Kloppenburg

a got of volume. of kind lot Just

Michael Henry

Hi, Janet.

Janet Kloppenburg

that if better bit the will -- what PPC think outlook what business forward, accelerate in the the are glitch you the talk And feed could timing trends I bottoms it that that marketing the happy for if side, And positive? wondering into industry with in comp plan seek you the forward, the as channel also you is are about when or grow there you higher just you and you digital just we you little women’s going on talked is side digital improvement, most encouraged a with you. was experiencing? to on I about about business could improved has turned operational for that line Thank notably around the was perhaps resolved. enabling also be wondering that actually

Ed Thomas

Okay.

So the system, with went beginning e-comm, new of… live we at starting again, the with

Michael Henry

November. Early

Ed Thomas

management of we’ve very to positive the saw … period. in saw -- high we then weeks the volume the it results and we beginning and early and as related glitches few a first started inventory to see November December during omnichannel

-- most of take really on we it little have So the sometime be the what back-to-school of and good capabilities believe timing some some to the -- there’s it still problems, fixed the early identified in expected ones are beginning, we’ve at while, back but should omnichannel are which be quarter. channels. turned been a And of in into going us be the with all second in a position should we remaining

So that’s of… kind

Janet Kloppenburg

great. That’s

Ed Thomas

back-to-school we’ve And what are. grow we we really into higher encouraged where the we’re to and slight seen I would volume anyway. we of starting true test think the improvement always Related going by expect see in opportunity get have the market to and as the get and e-comm is better we to again putting side, into progress women’s kind That’s we are aside as so to problems because now. these we so it significant months forward,

Janet Kloppenburg

be And the continues men’s solid? business to

Ed Thomas

Yes.

Janet Kloppenburg

luck. right. you, Good. All Good guys. Thank Okay.

Ed Thomas

Thanks All right. Janet.

Operator

of Ed to reached the turn I for end like And would Ladies Thomas we back remarks. session. the closing the call have gentlemen, question-and-answer and to

Ed Thomas

Have evening. Thank for late you quarter May. with forward you good in first look today. discussing joining again results our We us a to

Operator

This concludes conference. today’s

this participation. at lines your you your Thank time. for disconnect may You

Tilly's (TLYS) 12 Mar 182017 Q4 Earnings call transcript