In the third quarter, net sales from physical stores were $111.3 million, a decrease of 16.0 per cent. Comparable store net sales decreased 5.6 per cent relative to the comparable 13-week period ended November 4, 2023. Net sales from physical stores represented 77.6 per cent of total net sales this year compared to 79.6 per cent of total net sales last year. The company ended the third quarter with 246 total stores compared to 249 total stores at the end of the third quarter last year.
Tilly’s reported Q3 net sales of $143.4 million, down 13.8 per cent due to a calendar shift affecting back-to-school sales.
Comparable net sales fell 3.4 per cent, with physical store sales decreasing by 16 per cent and e-commerce by 5.4 per cent.
Gross profit dropped to $37.2 million. For Q4, the company expects net sales between $149 million to $156 million.
Net sales from e-commerce were $32.2 million in the third quarter, a decrease of 5.4 per cent. E-commerce net sales increased 4.9 per cent relative to the comparable 13-week period ended November 4, 2023. E-commerce net sales represented 22.4 per cent of total net sales this year compared to 20.4 per cent of total net sales last year, the company said in a press release.
Gross profit, including buying, distribution, and occupancy costs, was $37.2 million, or 25.9 per cent of net sales, compared to $48.7 million, or 29.3 per cent of net sales, last year. Product margins were generally consistent with last year’s third quarter, declining by 10 basis points. Buying, distribution, and occupancy costs deleveraged by 320 basis points collectively, despite being $0.7 million lower than last year, primarily due to carrying these costs against a lower level of net sales this year.
“Our third quarter results included our best quarterly comp sales performance since fiscal 2021, our first month of positive comp sales since February 2022 during fiscal August, and our second consecutive quarter of year-over-year store traffic growth,” said Hezy Shaked, co-founder, executive chairman, president and chief executive officer. “However, we still have a long way to go to return to generating consistent sales growth and profitability. We are disappointed in our net sales performance in the early stages of the fourth quarter, yet somewhat encouraged by our improved product margins thus far in the fourth quarter.”
Total comparable net sales through December 3, 2024 decreased by 15.3 per cent relative to the comparable period of last year ended December 5, 2023, with meaningfully improved product margins compared to last year. On a shifted basis, lining up the timing of this year’s Thanksgiving holiday with last year’s, total comparable net sales through December 3, 2024, decreased by 9.6 per cent relative to the comparable period of last year ended November 28, 2023.
Based on current and historical trends, the company currently estimates net sales to be in the range of approximately $149 million to $156 million in the fourth quarter, translating to an estimated comparable net sales decrease in the range of approximately 9 per cent to 5 per cent, respectively, relative to the comparable 13-week period last year.
Fibre2Fashion News Desk (RR)
