false000152402500015240252024-09-052024-09-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________
FORM 8-K
_______________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 5, 2024
_______________________________________________
TILLY’S, INC.
(Exact Name of Registrant as Specified in its Charter)  
Delaware
1-35535
45-2164791
(State of Incorporation)
(Commission File Number)
(IRS Employer
Identification Number)
10 Whatney
Irvine, California 92618
(Address of Principal Executive Offices) (Zip Code)
(949) 609-5599
(Registrant’s Telephone Number, Including Area Code)
  ______________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.001 par value per shareTLYSNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐


Item 2.02
Results of Operations and Financial Condition
On September 5, 2024, Tilly's, Inc. (the "Company") issued an earnings press release for the second quarter ended August 3, 2024. The press release is furnished as Exhibit 99.1 and is incorporated herein by reference. The information furnished pursuant to this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01
Financials Statements and Exhibits
The following exhibits are being furnished herewith.
(d)    Exhibits.
Exhibit No.
Exhibit Title or Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
TILLY’S, INC.
Date: September 5, 2024By: /s/ Michael L. Henry
Name:  Michael L. Henry
Title:  Executive Vice President, Chief Financial Officer


                                                    
 



Exhibit 99.1
tillyslogoa.jpg
Tilly's, Inc. Reports Fiscal 2024 Second Quarter Operating Results

Irvine, CA – September 5, 2024 – Tilly’s, Inc. (NYSE: TLYS, the "Company") today announced financial results for the second quarter of fiscal 2024 ended August 3, 2024.
"While the macro environment remains challenging for our customer demographic, we believe that our new pricing strategies are gaining traction as evidenced by our second consecutive quarter of improved product margins, and that we are beginning to drive improved customer engagement through our refocused marketing efforts," commented Hezy Shaked, Co-Founder and Interim President and Chief Executive Officer. "We are encouraged to have started the third quarter with a positive comp in fiscal August, representing our first positive monthly comparable net sales result since February 2022. However, we remain cautious in our third quarter outlook as our business has begun to slow down following the peak of the back-to-school season, consistent with the trend pattern in recent years."
Operating Results Overview
Fiscal 2024 Second Quarter Operating Results Overview
The following comparisons refer to the Company's operating results for the second quarter of fiscal 2024 ended August 3, 2024 versus the second quarter of fiscal 2023 ended July 29, 2023.
•Total net sales were $162.9 million, an increase of $2.9 million or 1.8%, compared to $160.0 million last year, primarily due to the calendar shift impact of last year's 53rd week in the retail calendar, which caused a portion of the back-to-school season's sales volume to shift into the latter stages of the second quarter from the beginning of the third quarter last year. Total comparable net sales, including both physical stores and e-commerce ("e-com"), decreased by 7.8% relative to the shifted 13-week period ended August 5, 2023.
◦Net sales from physical stores were $132.3 million, an increase of $2.5 million or 2.0%, compared to $129.8 million last year, with a comparable store net sales decrease of 7.9%. Net sales from physical stores represented 81.3% of total net sales this year compared to 81.1% of total net sales last year. The Company ended the second quarter with 247 total stores compared to 246 total stores at the end of the second quarter last year.
◦Net sales from e-com were $30.5 million, an increase of $0.4 million or 1.3%, compared to $30.2 million last year. E-com net sales represented 18.7% of total net sales this year compared to 18.9% of total net sales last year.
•Gross profit, including buying, distribution, and occupancy costs, was $49.9 million, or 30.7% of net sales, compared to $44.3 million, or 27.7% of net sales, last year. Product margins improved by 270 basis points primarily due to the combination of improved initial markups and lower total markdowns. Buying, distribution, and occupancy costs improved by 30 basis points collectively, primarily due to carrying these costs against a higher level of net sales this year.
•Selling, general and administrative ("SG&A") expenses were $50.8 million, or 31.2% of net sales, compared to $47.0 million, or 29.4% of net sales, last year. The $3.8 million increase in SG&A was primarily attributable to increases in store payroll and related benefits of $1.5 million due primarily to average wage rate increases, digital marketing expenses of $0.7 million, software as a service expense of $0.6 million, and corporate payroll and related benefits of $0.5 million.
•Operating loss was $0.9 million, or 0.5% of net sales, compared to an operating loss of $2.7 million, or 1.7% of net sales, last year, due to the combined impact of the factors noted above.
•Pre-tax loss was $0.1 million, or break-even as a percentage of net sales, compared to a pre-tax loss of $1.5 million, or 0.9% of net sales, last year.
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•Income tax benefit was $4.5 thousand or 6.2% of pre-tax loss, compared to an income tax benefit of $0.3 million, or 23.2% of pre-tax loss, last year. The decrease in the effective income tax rate was due to an immaterial state tax benefit arising in a quarter with a nearly break-even pre-tax loss.
•Net loss was $0.1 million, or $0.00 net loss per share, compared to a net loss of $1.1 million, or $0.04 net loss per share, last year. Weighted average shares were 30.0 million this year compared to 29.8 million shares last year.
Fiscal 2024 First Half Operating Results Overview
The following comparisons refer to the Company's operating results for the first half of fiscal 2024 ended August 3, 2024 versus the first half of fiscal 2023 ended July 29, 2023.
•Total net sales were $278.7 million, a decrease of $4.9 million or 1.7%, compared to $283.6 million last year, primarily due to a decline in comparable net sales partially offset by the calendar shift impact of last year's 53rd week in the retail calendar, which caused a portion of the back-to-school season's sales volume to shift into the second quarter this year from the beginning of the third quarter last year. Total comparable net sales, including both physical stores and e-commerce ("e-com"), decreased by 8.4% relative to the shifted 26-week period ended August 5, 2023.
◦Net sales from physical stores were $225.2 million, a decrease of $2.5 million or 1.1%, compared to $227.6 million last year, with a comparable store net sales decrease of 8.2%. Net sales from physical stores represented 80.8% of total net sales this year compared to 80.3% of total net sales last year.
◦Net sales from e-com were $53.6 million, a decrease of $2.4 million or 4.3%, compared to $56.0 million last year. E-com net sales represented 19.2% of total net sales this year compared to 19.7% of total net sales last year.
•Gross profit, including buying, distribution, and occupancy costs, was $74.2 million, or 26.6% of net sales, compared to $70.3 million, or 24.8% of net sales, last year. Product margins improved by 210 basis points primarily due to the combination of improved initial markups and lower total markdowns. Buying, distribution, and occupancy costs deleveraged by 30 basis points collectively, despite being $0.6 million lower than last year, primarily due to carrying these costs against lower net sales this year.
•Selling, general and administrative ("SG&A") expenses were $95.9 million, or 34.4% of net sales, compared to $90.2 million, or 31.8% of net sales, last year. The $5.7 million increase in SG&A was primarily attributable to increases in store payroll and related benefits of $2.5 million due primarily to average wage rate increases, non-cash store asset impairment charges of $1.5 million, corporate payroll and related benefits of $1.0 million, and software as a service expense of $0.9 million. These increases were partially offset by a variety of smaller expense decreases.
•Operating loss was $21.6 million, or 7.8% of net sales, compared to an operating loss of $19.9 million, or 7.0% of net sales, last year, due to the combined impact of the factors noted above.
•Pre-tax loss was $19.7 million, or 7.1% of net sales, compared to a pre-tax loss of $17.7 million, or 6.2% of net sales, last year.
•Income tax benefit was $17.2 thousand or 0.1% of pre-tax loss, compared to an income tax benefit of $4.6 million, or 25.9% of pre-tax loss, last year. The decrease in the effective income tax rate was primarily attributable to the continuing impact of the valuation allowance.
•Net loss was $19.7 million, or $0.66 net loss per share, compared to a net loss of $13.1 million, or $0.44 net loss per share, last year. Weighted average shares were 30.0 million this year compared to 29.8 million shares last year.
Balance Sheet and Liquidity
As of August 3, 2024, the Company had $76.7 million of cash, cash equivalents and marketable securities and no debt outstanding, compared to $104.3 million and no debt outstanding as of July 29, 2023. Total inventories increased 4.1% as of August 3, 2024 compared to July 29, 2023. Total year-to-date capital
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expenditures at the end of the second quarter were $4.6 million this year compared to $6.3 million last year.
Fiscal 2024 Third Quarter Outlook
Total comparable net sales for fiscal August ended August 31, 2024, increased by 1.0% relative to the comparable four-week period last year. Due to the impact of the 53rd week in last year's retail calendar, total net sales for this year's third quarter will start with an $18.4 million deficit in net sales compared to last year's third quarter as a result of a large back-to-school net sales week shifting into the end of the second quarter this year from what was in the beginning of the third quarter last year. Based on this timing shift, current quarter-to-date comparable net sales results and current and historical trends, the Company currently estimates the following for the third quarter of fiscal 2024:
•Net sales to be in the range of approximately $140 million to $146 million, translating to an estimated comparable net sales decrease in the range of approximately (6)% to (2)%, respectively, relative to the comparable 13-week period last year;
•SG&A expenses to be approximately $49 million before factoring in any potential non-cash store asset impairment charges which may arise;
•Pre-tax loss and net loss to be in the range of approximately $(11.6) million to $(8.7) million, respectively, with a near-zero effective income tax rate due to the continuing impact of a full, non-cash valuation allowance on deferred tax assets; and
•Per share results to be in the range of a net loss of $(0.39) to $(0.29), respectively, with estimated weighted average shares of approximately 30 million.
The Company currently expects to have 246 total stores open at the end of the third quarter of fiscal 2024 compared to 249 at the end of last year's third quarter.
Conference Call Information
A conference call to discuss these financial results is scheduled for today, September 5, 2024, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to dial (877) 300-8521 (domestic) or (412) 317-6026 (international). The conference call will also be available to interested parties through a live webcast at www.tillys.com. Please visit the website and select the “Investor Relations” link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until September 12, 2024, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 10191499.
About Tillys
Tillys is a leading, destination specialty retailer of casual apparel, footwear, accessories and hardgoods for young men, young women, boys and girls with an extensive selection of iconic global, emerging, and proprietary brands rooted in an active, outdoor and social lifestyle. Tillys is headquartered in Irvine, California and currently operates 247 total stores across 33 states, as well as its website, www.tillys.com.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements regarding our current operating expectations in light of historical results, the impacts of inflation and potential recession on us and our customers, including on our future financial condition or operating results, expectations regarding changes in the macro-economic environment, customer traffic, our supply chain, our ability to properly manage our inventory levels, and any other statements about our future cash position, financial flexibility, expectations, plans, intentions, beliefs or prospects expressed by management are forward-looking statements. These forward-looking statements are based on management’s current expectations and beliefs, but they involve a number of risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to the impact of inflation on consumer behavior and our business and operations, supply chain difficulties,
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and our ability to respond thereto, our ability to respond to changing customer preferences and trends, attract customer traffic at our stores and online, execute our growth and long-term strategies, expand into new markets, grow our e-commerce business, effectively manage our inventory and costs, effectively compete with other retailers, attract talented employees, or enhance awareness of our brand and brand image, general consumer spending patterns and levels, including changes in historical spending patterns, the markets generally, our ability to satisfy our financial obligations, including under our credit facility and our leases, and other factors that are detailed in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”), including those detailed in the section titled “Risk Factors” and in our other filings with the SEC, which are available on the SEC’s website at www.sec.gov and on our website at www.tillys.com under the heading “Investor Relations”. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. This release should be read in conjunction with our financial statements and notes thereto contained in our Form 10-K.
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Tilly’s, Inc.
Consolidated Balance Sheets
(In thousands, except par value)
(unaudited)
August 3,
2024		February 3,
2024		July 29,
2023
ASSETS
Current assets:
Cash and cash equivalents$36,749 $47,027 $54,578 
Marketable securities39,947 48,021 49,700 
Receivables13,176 5,947 10,922 
Merchandise inventories95,011 63,159 91,251 
Prepaid expenses and other current assets9,539 11,905 9,209 
Total current assets194,422 176,059 215,660 
Operating lease assets188,711 203,825 224,537 
Property and equipment, net44,612 48,063 48,353 
Deferred tax assets, net— — 12,973 
Other assets1,452 1,598 1,764 
TOTAL ASSETS$429,197 $429,545 $503,287 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$42,961 $14,506 $44,763 
Accrued expenses20,011 13,063 18,972 
Deferred revenue13,615 14,957 14,012 
Accrued compensation and benefits11,488 9,902 8,358 
Current portion of operating lease liabilities51,414 48,672 51,243 
Current portion of operating lease liabilities, related party3,269 3,121 2,977 
Other liabilities270 336 425 
Total current liabilities143,028 104,557 140,750 
Long-term liabilities:
Noncurrent portion of operating lease liabilities141,565 160,531 176,310 
Noncurrent portion of operating lease liabilities, related party17,596 19,267 20,865 
Other liabilities235 321 447 
Total long-term liabilities159,396 180,119 197,622 
Total liabilities302,424 284,676 338,372 
Stockholders’ equity:
Common stock (Class A)23 23 23 
Common stock (Class B)7 7 7 
Preferred stock— — — 
Additional paid-in capital173,939 172,478 171,195 
Accumulated deficit(47,652)(27,962)(6,563)
Accumulated other comprehensive income456 323 253 
Total stockholders’ equity126,773 144,869 164,915 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$429,197 $429,545 $503,287 

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Tilly’s, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
 Thirteen Weeks EndedTwenty-Six Weeks Ended
 August 3,
2024		July 29,
2023		August 3, 2024July 29, 2023
Net sales$162,867 $159,951 $278,723 $283,588 
Cost of goods sold (includes buying, distribution, and occupancy costs)112,013 114,704202,625 211,472 
Rent expense, related party934 9311,865 1,862 
Total cost of goods sold (includes buying, distribution, and occupancy costs)112,947 115,635204,490 213,334 
Gross profit49,920 44,31674,233 70,254 
Selling, general and administrative expenses50,648 46,86895,616 89,934 
Rent expense, related party131 133264 266 
Total selling, general and administrative expenses50,779 47,00195,880 90,200 
Operating loss(859)(2,685)(21,647)(19,946)
Other income, net786 1,2201,940 2,284 
Loss before income taxes(73)(1,465)(19,707)(17,662)
Income tax benefit (4)(340)(17)(4,569)
Net loss$(69)$(1,125)$(19,690)$(13,093)
Basic net loss per share of Class A and Class B common stock$(0.00)$(0.04)$(0.66)$(0.44)
Diluted net loss per share of Class A and Class B common stock$(0.00)$(0.04)$(0.66)$(0.44)
Weighted average basic shares outstanding30,029 29,831 29,995 29,815 
Weighted average diluted shares outstanding30,029 29,831 29,995 29,815 




















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Tilly’s, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
 Twenty-Six Weeks Ended
 August 3,
2024		July 29,
2023
Cash flows from operating activities
Net loss$(19,690)$(13,093)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization6,305 6,457 
Insurance proceeds from casualty loss131 — 
Stock-based compensation expense1,167 1,078 
Impairment of assets2,499 955 
(Gain) loss on disposal of assets(35)28 
Gain on maturities of marketable securities(1,121)(961)
Deferred income taxes— (4,476)
Changes in operating assets and liabilities:
Receivables(6,863)(801)
Merchandise inventories(31,983)(29,134)
Prepaid expenses and other assets3,003 8,230 
Accounts payable28,436 28,768 
Accrued expenses7,048 4,274 
Accrued compensation and benefits1,586 175 
Operating lease liabilities(4,112)(2,994)
Deferred revenue(1,342)(2,091)
Other liabilities(232)(314)
Net cash used in operating activities(15,203)(3,899)
Cash flows from investing activities
Purchases of marketable securities(39,290)(53,904)
Purchases of property and equipment(4,625)(6,310)
Proceeds from maturities of marketable securities48,500 45,081 
Insurance proceeds from casualty loss23 — 
Proceeds from sale of property and equipment23 — 
Net cash provided by (used in) investing activities4,631 (15,133)
Cash flows from financing activities
Proceeds from exercise of stock options294 84 
Net cash provided by financing activities294 84 
Change in cash and cash equivalents(10,278)(18,948)
Cash and cash equivalents, beginning of period47,027 73,526 
Cash and cash equivalents, end of period$36,749 $54,578 






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Tilly's, Inc.
Store Count and Square Footage

Store
 Count at
 Beginning of Quarter		New Stores
 Opened
During Quarter		Stores
 Permanently Closed
During Quarter		Store Count at
 End of Quarter		Total Gross
 Square Footage
 End of Quarter
 (in thousands)
2023 Q1249122481,809
2023 Q2248—22461,792
2023 Q32463—2491,810
2023 Q4249342481,801
2024 Q1248242461,784
2024 Q22461—2471,791


Investor Relations Contact:
Michael Henry, Executive Vice President, Chief Financial Officer
(949) 609-5599, ext. 17000
irelations@tillys.com

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Cover
Sep. 05, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Sep. 05, 2024
Entity Registrant Name TILLY’S, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 1-35535
Entity Tax Identification Number 45-2164791
Entity Address, Address Line One 10 Whatney
Entity Address, City or Town Irvine
Entity Address, State or Province CA
Entity Address, Postal Zip Code 92618
City Area Code (949)
Local Phone Number 609-5599
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, $0.001 par value per share
Trading Symbol TLYS
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001524025
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