Tillys Inc (TLYS) 2023 Q1 法說會逐字稿

Good afternoon, and welcome to the Tilly's First Quarter 2023 Results Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Gar Jackson, Investor Relations. Please go ahead.

下午好，歡迎參加 Tilly 2023 年第一季度業績電話會議。 （操作員說明）請注意此事件正在被記錄。我現在想將會議交給投資者關係部的 Gar Jackson。請繼續。

Good afternoon, and welcome to the Tilly's Fiscal 2023 First Quarter Earnings Call. Ed Thomas, President and CEO; and Michael Henry, CFO, will discuss the company's results and then host a Q&A session. For copy of Tilly's earnings press release, please visit the Investor Relations section of the company's website at tillys.com.

下午好，歡迎參加 Tilly 的 2023 財年第一季度收益電話會議。艾德·托馬斯，總裁兼首席執行官；首席財務官邁克爾·亨利將討論公司的業績，然後主持問答環節。如需 Tilly 收益新聞稿的副本，請訪問該公司網站tillys.com 的投資者關係部分。

From the same section, shortly after the conclusion of the call, you will also be able to find a recorded replay of this call for the next 30 days. Certain forward-looking statements will be made during this call that reflect Tilly's judgment and analysis only as of today June 1, 2023, and actual results may differ materially from current expectations based on various factors affecting Tilly's business. Accordingly, you should not place undue reliance on these forward-looking statements.

在通話結束後不久的同一部分中，您還可以找到此通話在接下來 30 天內的錄音重播。本次電話會議期間將做出某些前瞻性陳述，這些陳述僅反映 Tilly 截至 2023 年 6 月 1 日的判斷和分析，根據影響 Tilly 業務的各種因素，實際結果可能與當前預期存在重大差異。因此，您不應過度依賴這些前瞻性陳述。

For a more thorough discussion of the risks and uncertainties associated with any forward-looking statements, please see the disclaimer regarding forward-looking statements that is included in our fiscal 2023 first quarter earnings release, which is furnished to the SEC today on Form 8-K as well as our other filings with the SEC referenced in that disclaimer.

如需對與任何前瞻性陳述相關的風險和不確定性進行更全面的討論，請參閱我們今天以表格8 形式向SEC 提供的2023 財年第一季度收益發布中包含的有關前瞻性陳述的免責聲明： K 以及該免責聲明中引用的我們向 SEC 提交的其他文件。

Today's call will be limited to 1 hour and will include a Q&A session after our prepared remarks. I will now turn the call over to Ed.

今天的電話會議時間僅限 1 小時，在我們準備好的發言後將包括問答環節。我現在將把電話轉給埃德。

Thanks, Gar. Good afternoon, everyone, and thank you for joining us today. Our first quarter results were within our estimated outlook ranges. April results were less negative in terms of comparable net sales than in February and March. We believe the combination of an uncertain and inflationary economic environment for our teen, young adult, young family customer demographic and prolonged unseasonable weather in California during February and March, along with certain assortment issues resulting in a weak quarter overall.

謝謝，加爾。大家下午好，感謝您今天加入我們。我們第一季度的業績在我們預計的前景範圍內。就可比淨銷售額而言，4 月份的業績比 2 月份和 3 月份的負面影響要小一些。我們認為，青少年、年輕成人、年輕家庭客戶群面臨的不確定性和通脹性經濟環境，以及 2 月和 3 月加利福尼亞州長期不合時宜的天氣，以及某些商品分類問題，導致整體季度表現疲弱。

Not surprisingly, considering the cold wet weather in the West, in particular, our spring/summer product categories were more challenged than our winter product categories during the first quarter. Footwear performed best with a single-digit negative sales comp percentage compared to last year, while all other merchandising departments produced double-digit negative sales comp results. California, with 40% of our total stores was our weakest performing geographic area in both stores and online.

毫不奇怪，特別是考慮到西方寒冷潮濕的天氣，我們的春夏產品類別在第一季度比冬季產品類別面臨更大的挑戰。與去年相比，鞋類表現最佳，銷售業績為個位數負值，而所有其他銷售部門的銷售業績為兩位數負值。加利福尼亞州（占我們商店總數的 40%）是我們在商店和在線商店中表現最弱的地理區域。

Total store transactions decreased by a high teens percentage during the quarter, although better in April than earlier in the quarter. The less negative April trend has carried into the second quarter thus far, our total comparable sales -- net sales through May 30 decreased 11.5%. Our spring/summer product categories have performed better than they did during the first quarter, led by women's and girls, which have comp positive compared to last year. On an overall basis, footwear in girls have comped positive thus far in the second quarter, while all other departments remain negative.

本季度商店總交易量下降了十幾%，儘管 4 月份的情況好於本季度早些時候。 4 月份負面趨勢有所緩解，這一趨勢已延續到第二季度，截至 5 月 30 日，我們的可比銷售額總額（淨銷售額）下降了 11.5%。我們的春夏產品類別表現好於第一季度，其中以女裝和女童產品為主，與去年相比，這些產品的業績比較樂觀。總體而言，第二季度迄今為止，女童鞋類的業績表現良好，而其他部門仍然表現不佳。

We generally feel good about our spring/summer merchandise assortment and our inventory aging was more current entering the second quarter compared to last year. However, the negative impacts of inflation and other macroeconomic factors on our young customer demographic remain a concern in the near term.

我們總體上對我們的春夏商品品種感覺良好，並且與去年相比，我們的庫存老化在進入第二季度時更加明顯。然而，通脹和其他宏觀經濟因素對我們年輕客戶群體的負面影響在短期內仍然令人擔憂。

In positive news, we hired our new Chief Merchandising Officer, Laura Janney who joined us on May 8, having previously been in senior merchandise positions at both Hudson's Bay and Nordstrom. We're excited to see what her tremendous experience will bring to our business, particularly as her influence on our merchandise assortment becomes apparent over time.

好消息是，我們聘請了新的首席營銷官 Laura Janney，她於 5 月 8 日加入我們，此前她曾在 Hudson's Bay 和 Nordstrom 擔任高級商品職位。我們很高興看到她豐富的經驗將為我們的業務帶來什麼，特別是隨著時間的推移，她對我們商品種類的影響變得越來越明顯。

We also just hired a new Vice President of Merchandise Planning and Allocation with extensive experience who started last week. We believe these 2 new leaders give us a meaningful opportunity to take a fresh look at how we do business and help us get back on track to delivering sales growth over time.

我們還剛剛聘請了一位新的商品規劃和分配副總裁，他上週上任，具有豐富的經驗。我們相信，這兩位新領導者為我們提供了一個有意義的機會，讓我們重新審視我們的業務經營方式，並幫助我們重回正軌，隨著時間的推移實現銷售增長。

Despite short-term challenges, we continue to invest in our business for the long term. We just relaunched our mobile app in early May with several customer-friendly features. We will continue adding features to this new app over the next couple of quarters. We also continue to make progress in developing a new warehouse management system to improve efficiencies of labor and inventory management across our 2 distribution facilities here in Irvine. We currently expect that this important upgrade will be completed in early fiscal 2024 and that it will better position us for future growth.

儘管面臨短期挑戰，我們仍繼續對業務進行長期投資。我們剛剛在五月初重新推出了我們的移動應用程序，其中包含一些客戶友好的功能。我們將在接下來的幾個季度繼續為這個新應用程序添加功能。我們還在開發新的倉庫管理系統方面繼續取得進展，以提高我們位於爾灣的 2 個配送設施的勞動力和庫存管理效率。我們目前預計這一重要升級將於 2024 財年初完成，這將為我們未來的增長做好更好的準備。

In terms of store real estate, we now expect to have 7 new store openings during fiscal 2023. One store opened in late March -- are expected to open during the -- 4 expected to open during the third quarter and 2 are expected to open in the fourth quarter. Three stores originally planned for this year have been pushed into 2024 due to delays in timing of spaces being made available to us.

就商店房地產而言，我們目前預計2023 財年期間將開設7 家新店。其中1 家商店於3 月下旬開業，預計將在2023 財年開業，4 家商店預計將在第三季度開業，2 家商店預計將在第三季度開業在第四季度。由於向我們提供空間的時間延遲，原計劃今年開設的 3 家商店已推遲到 2024 年。

For existing stores, we are approximately 60% complete with our fiscal 2023 lease decisions. Given the current environment, we continue to approach all lease renewals with reasonable conservatism to manage lease costs as much as possible. At this time, we expect to close 3 stores during fiscal 2023, 2 of which have already closed. We remain open to additional store growth opportunities where economics make sense.

對於現有商店，我們的 2023 財年租賃決策已完成約 60%。鑑於當前環境，我們繼續以合理保守的態度處理所有租約續約，以盡可能管理租賃成本。目前，我們預計在 2023 財年期間將關閉 3 家門店，其中 2 家已經關閉。在經濟上合理的情況下，我們仍然對額外的商店增長機會持開放態度。

I now turn the call over to Mike to provide additional details on our fiscal 2023 first quarter operating performance and to introduce our second quarter outlook. Mike?

我現在將電話轉給 Mike，請他提供有關我們 2023 財年第一季度運營業績的更多詳細信息，並介紹我們第二季度的前景。麥克風？

Thanks, Ed. Good afternoon, everyone. Our fiscal 2023 first quarter results compared to last year's first quarter were as follows. Total net sales were $123.6 million, a decrease of 15.2%. Net sales from physical stores represented 79.1% of total net sales compared to 80.6% last year, while e-commerce net sales represented 20.9% of total net sales compared to 19.4% last year. Total comparable net sales, including e-commerce, decreased by 17.5% with a 19.7% decrease from physical stores and an 8.3% decrease from e-commerce. We ended the first quarter with 248 total stores, a net increase of 7 stores compared to last year.

謝謝，艾德。大家下午好。我們的 2023 財年第一季度業績與去年第一季度相比如下。總淨銷售額為 1.236 億美元，下降 15.2%。實體店淨銷售額佔總淨銷售額的79.1%，而去年為80.6%；電子商務淨銷售額佔總淨銷售額的20.9%，而去年為19.4%。包括電子商務在內的可比淨銷售額總額下降了17.5%，其中實體店下降了19.7%，電子商務下降了8.3%。截至第一季度末，我們的門店總數為 248 家，比去年淨增加 7 家。

Gross margin, including buying, distribution and occupancy expenses, was 21.0% of net sales compared to 30.1% of net sales last year. Buying, distribution and occupancy costs deleveraged by 620 basis points and increased by $2.4 million collectively, predominantly from occupancy costs as a result of operating 7 net additional stores. Product margins declined by 290 basis points, primarily due to a higher level of markdowns utilized to manage inventory levels.

毛利率（包括購買、分銷和占用費用）占淨銷售額的 21.0%，而去年為淨銷售額的 30.1%。採購、分銷和占用成本去槓桿化了 620 個基點，總計增加了 240 萬美元，主要來自淨增運營 7 家門店的佔用成本。產品利潤率下降了 290 個基點，主要是由於用於管理庫存水平的降價幅度較大。

Total SG&A expenses were $43.2 million or 34.9% of net sales compared to $42.7 million or 29.3% of net sales last year. Primary increases in SG&A were attributable to corporate payroll as a result of wage inflation, Software-as-a-Service expenses and recruiting expenses associated with the hiring of our new CMO. These increases were partially offset by a $0.9 million reduction in store payroll and related benefits resulting from an admirable job by our store teams of managing store payroll hours despite operating 7 net additional stores and absorbing an average 8% hourly wage rate increase compared to last year.

SG&A 費用總額為 4,320 萬美元，占淨銷售額的 34.9%，而去年為 4,270 萬美元，占淨銷售額的 29.3%。 SG&A 的增長主要歸因於工資上漲導致的企業薪資、軟件即服務費用以及與僱用新首席營銷官相關的招聘費用。這些增長被商店工資和相關福利的90 萬美元減少部分抵消，這是由於我們的商店團隊在管理商店工資工時方面所做的令人欽佩的工作，儘管淨增運營7 家商店，並且與去年相比平均每小時工資上漲8% 。

Operating loss was $17.3 million or 14% of net sales compared to operating income of $1.1 million or 0.8% of net sales last year as a result of the combined factors just noted. Other income was $1.1 million compared to breakeven last year, primarily due to earnings significantly higher rates of return on our marketable securities compared to last year. Income tax benefit was $4.2 million or 26.1% of pretax loss compared to income tax expense of $0.3 million or 26.9% of pretax income last year. Net loss was $12 million or $0.40 per share compared to net income of $0.8 million or $0.03 per diluted share last year. Weighted average shares were 29.8 million this year compared to 31.0 million last year.

由於剛才提到的綜合因素，去年營業虧損為 1730 萬美元，占淨銷售額的 14%，而去年營業收入為 110 萬美元，占淨銷售額的 0.8%。與去年盈虧平衡相比，其他收入為 110 萬美元，這主要是由於我們的有價證券的回報率與去年相比顯著提高。所得稅收益為 420 萬美元，佔稅前虧損的 26.1%，而去年所得稅支出為 30 萬美元，佔稅前收入的 26.9%。淨虧損為 1,200 萬美元，即每股 0.40 美元，而去年的淨利潤為 80 萬美元，即每股攤薄收益 0.03 美元。今年的加權平均股數為 2,980 萬股，而去年為 3,100 萬股。

Turning to our balance sheet. We ended the first quarter with total cash and marketable securities of $93 million and no debt outstanding compared to $111 million and no debt last year. We ended the first quarter with total inventories at cost up 1.6% per square foot, but down 5.8% in total units per square foot compared to last year. Total capital expenditures for the first quarter were $4.3 million compared to $2.6 million last year. With 7 new store openings currently expected for fiscal 2023, we now expect our total capital expenditures for the year to be approximately $15 million.

轉向我們的資產負債表。第一季度結束時，我們的現金和有價證券總額為 9300 萬美元，沒有未償還債務，而去年為 1.11 億美元，沒有任何債務。第一季度結束時，我們的總庫存成本每平方英尺增加了 1.6%，但與去年相比，每平方英尺總單位數下降了 5.8%。第一季度的總資本支出為 430 萬美元，而去年為 260 萬美元。目前預計 2023 財年將開設 7 家新店，因此我們預計今年的總資本支出約為 1500 萬美元。

Turning to our outlook for the second quarter of fiscal 2023. Total comparable net sales through May 30 decreased by 11.5% compared to last year. Based on current and historical trends, we currently estimate that our total net sales for the second quarter of fiscal 2023 will be in the range of approximately $148 million to $158 million translating to a comparable store net sales decline in the range of approximately 10% to 15% for the second quarter of fiscal 2023 compared to last year. We expect our SG&A to be in the range of $49 million to $50 million. At these sales levels, we would expect to report a loss per share in the range of $0.13 to $0.27, with an estimated income tax rate of 26.1% and total shares outstanding of 29.9 million. We currently expect to have 248 total stores at the end of the second quarter compared to 242 at the end of last year's second quarter.

談到我們對 2023 財年第二季度的展望。截至 5 月 30 日的可比淨銷售額總額與去年同期相比下降了 11.5%。根據當前和歷史趨勢，我們目前估計 2023 財年第二季度的總淨銷售額將在約 1.48 億美元至 1.58 億美元之間，相當於可比商店淨銷售額下降約 10% 至 10%。 2023 財年第二季度與去年相比增長15%。我們預計 SG&A 為 4,900 萬至 5,000 萬美元。在這些銷售水平上，我們預計每股虧損為 0.13 美元至 0.27 美元，預計所得稅率為 26.1%，流通股總數為 2,990 萬股。我們目前預計第二季度末門店總數為 248 家，而去年第二季度末為 242 家。

Operator, we'll now go to our Q&A session.

接線員，我們現在進入問答環節。

(Operator Instructions) Our first question is from Matt Koranda with ROTH Capital.

（操作員說明）我們的第一個問題來自 ROTH Capital 的 Matt Koranda。

Just a quick one to start. Ed, you mentioned some assortment issues that may have caused some challenges inside the quarter aside from just the weather and kind of the general macro weakness. Can you just elaborate on that?

只需快速開始即可。艾德，您提到了一些分類問題，除了天氣和總體宏觀疲軟之外，這些問題可能在本季度造成了一些挑戰。您能詳細說明一下嗎？

Sure. And nothing -- no major category or -- no major category did we see any major assortment issues. There's always some. But I think most of the challenge was due to seasonal categories not performing as well as they normally would like shorts and swim primarily because of weather.

當然。我們沒有看到任何主要類別或任何主要類別出現任何重大分類問題。總有一些。但我認為大部分挑戰是由於季節性類別表現不佳，他們通常喜歡短褲和游泳，主要是因為天氣原因。

Okay. Got it. And then just on the second quarter revenue guide, maybe you can just unpack that a bit in terms of the low end, high end for us. It looks like the low end probably assumes that sort of the May comp just kind of hold steady through the rest of the quarter. Maybe you could just elaborate on sort of how to think about what's embedded on the low end versus the high end of the second quarter revenue guide?

好的。知道了。然後就第二季度的收入指南而言，也許您可​​以為我們從低端和高端方面進行一些分析。看起來低端可能假設五月份的比較在本季度剩餘時間內保持穩定。也許您可以詳細說明如何思考第二季度收入指南的低端與高端的嵌入內容？

Sure, Matt. So on the low end, really is based on the average of the last several years, excluding the 2020 pandemic year. Looking at the last 5 to 6 years average history of Q1 to Q2 build, Q2 is always larger than Q1, that average of that 5- to 6-year period would get you to the low end. The high end is looking at May as a percentage of Q2. It's usually right around 25%, slightly over 25%. Again, looking at the last 5, 6 years, cumulative average of May as a percentage of Q2, that would get you to the high end of the range, and we're sitting in between those 2 numbers as we speak. So I felt like that was a very reasonable range based on documented history of how our business has performed across environments over the years. So that's how you get to either end.

當然，馬特。因此，在低端，實際上是基於過去幾年的平均值，不包括 2020 年大流行年份。看看過去 5 到 6 年第一季度到第二季度構建的平均歷史，第二季度總是大於第一季度，這 5 到 6 年期間的平均值將使您達到低端。高端人士將五月視為第二季度的百分比。通常在 25% 左右，略高於 25%。再次，看看過去 5、6 年中 5 月的累積平均值佔第二季度的百分比，這將使您達到該範圍的高端，而我們現在正處於這兩個數字之間。因此，根據多年來我們的業務在不同環境中的表現記錄的歷史記錄，我覺得這是一個非常合理的範圍。這就是你到達任一終點的方式。

Got you. And then maybe you could talk about the sort of what you're seeing in the latest comp from May just in terms of traffic versus ticket? And if you could just kind of unpack some of the trends that you're seeing there, that would be helpful.

明白你了。然後也許您可以談談您在 5 月份的最新比較中所看到的流量與門票方面的情況？如果你能解開你在那裡看到的一些趨勢，那將會很有幫助。

Sure. So traffic has been consistent. Overall, traffic was down 12% in Q1, and it was down 12% in May. It's really all transactions, which, to me, speaks to an overall environmental type of issue. Transactions were down 17.5% in Q1 and they've been down almost 15% in May. So consistent there. Our average sale really hasn't moved that much. It's been plus or minus less than 3%. In Q1, it was down less than 3%. And in May, it was actually back up 2.5%. So the people that are buying seem to be buying a consistent amount in terms of average transaction value. Conversion has moved just a few percentage points. It was down 6% in Q1 and is down 2.7% in May. It really is traffic and transactions that are the double-digit movement. Everything else is what I'd call fairly consistent.

當然。所以流量一直是穩定的。總體而言，第一季度流量下降了 12%，5 月份也下降了 12%。這實際上是所有交易，對我來說，這涉及整體環境類型的問題。第一季度的交易量下降了 17.5%，5 月份的交易量下降了近 15%。那裡如此一致。我們的平均銷售額確實沒有太大變化。正負值還不到3%。第一季度下降幅度不到 3%。 5 月份，它實際上回升了 2.5%。因此，就平均交易價值而言，購買者的購買量似乎是一致的。轉化率僅上升了幾個百分點。第一季度下降 6%，5 月份下降 2.7%。確實是流量和交易量出現了兩位數的變化。其他一切我認為都相當一致。

Okay. Fair enough. And then just maybe on the product margin, from merch margin, could you just talk about trends there that did take a bit of a step down. I wanted to see how we should think about that number going forward, just given the overall promotional environment that we're dealing with.

好的。很公平。然後，也許在產品利潤、商品利潤方面，您能否談談確實有所下降的趨勢。我想看看，考慮到我們正在處理的整體促銷環境，我們應該如何考慮未來的數字。

Yes. As always, when we look at what the sales trends tell us where the business is headed. We contemplate what we think we might need to make sure we keep inventory in a healthy position and not let ourselves get over inventoried with too much seasonal risk as we move forward. So the first quarter was obviously a struggle very clearly during February and March. Each of February and March were down 20% plus. And then April was down 11.4%. May is also consistent with that. So we have an 8-week trend rate here that has been a little bit below 11% negative comp.

是的。與往常一樣，當我們觀察銷售趨勢時，我們會知道業務的發展方向。我們思考我們認為可能需要採取哪些措施來確保我們的庫存保持在健康的狀態，並且在我們前進的過程中不會讓我們因過多的季節性風險而過度庫存。因此，第一季度在二月和三月期間顯然是一場鬥爭。 2 月和 3 月均下降 20% 以上。然後 4 月份下降了 11.4%。 May也與此一致。因此，我們這裡的 8 週趨勢率略低於 11% 的負值。

And if that is going to continue, we have contemplated taking certain actions that we'll need to take to keep our inventory fresh, allow for newness to keep getting delivered. As you know, as we get towards the end of the second quarter, the back-to-school season will be starting, some of the earliest markets start in mid- to late July. So we'll need to be ramping up for that, and we need to make sure that we have ample room to allow for that newness to come in and not cut off newness as we think about moving forward into the back half of the year. So we'll do what we need to do to keep inventory fresh, and we have that contemplated into our thinking for the second quarter.

如果這種情況繼續下去，我們已經考慮採取某些行動來保持我們的庫存新鮮，讓新產品不斷交付。如您所知，隨著第二季度末的臨近，返校季即將開始，一些最早的市場將於 7 月中下旬開始。因此，我們需要為此加大力度，並且需要確保有足夠的空間讓新鮮事物進入，而不是在我們考慮進入下半年時切斷新鮮事物。因此，我們將採取必要措施來保持庫存新鮮，我們已將這一點納入了第二季度的想法中。

Got it. Okay, maybe just one more for me and then I'll jump back in queue. But the occupancy costs for the rest of the year, maybe just any thoughts on how you guys are kind of approaching the remainder of the lease negotiations that you have? You mentioned you were like 60% through, I think. How are we thinking about sort of pressure from occupancy costs over the coming quarters?

知道了。好吧，也許再給我一個，然後我就會插回隊列。但是今年剩餘時間的入住成本，也許只是關於你們如何處理剩餘的租賃談判的任何想法？我想你提到你已經完成了 60%。我們如何看待未來幾個季度入住成本帶來的壓力？

Yes, the dollars are going to be up year-over-year because total store count is up year-over-year. So we had 7 net additional stores that each store cost some dollars. The way occupancy is treated from an accounting perspective, it's straight lined over the life of the lease, generally speaking, absent specific stores that are on pure percent rent deals. So the dollars don't move around that much from quarter-to-quarter. And then it's a matter of how are your comps performing relative to a relatively stable base of occupancy and then year-over-year adding stores that adds dollars. So the dollars will continue to be up a little bit.

是的，美元將會逐年上漲，因為商店總數逐年增加。所以我們淨增了 7 家商店，每家商店都要花費一些美元。從會計角度來看，入住率的處理方式在租賃期內是直線的，一般來說，不存在採用純百分比租金交易的特定商店。因此，美元每季度的波動幅度不大。然後，問題是你的公司相對於相對穩定的入住率基礎的表現如何，然後逐年增加商店以增加收入。因此美元將繼續小幅上漲。

We've been reasonably satisfied with what we've been able to achieve in terms of occupancy negotiations. As always, you've heard this from us again and again over many years now that we take a pretty darn hard look at what we expect on a go-forward basis for any given store. We use pretty reasonable sales assumptions to derive where we need to be. And if we're able to reach agreement with our landlord partners, we move forward. And if we can't, we're not afraid to close stores if we have to.

我們對在入住談判方面取得的成果感到相當滿意。與往常一樣，多年來您一次又一次地從我們這裡聽到了這樣的說法，因為我們非常認真地審視了我們對任何特定商店的未來期望。我們使用相當合理的銷售假設來得出我們需要達到的目標。如果我們能夠與房東合作夥伴達成協議，我們就會繼續前進。如果我們做不到，我們也不怕在必要時關閉商店。

But overall, I think just to add on to what Mike said, I think we're pretty satisfied with the direction that we've been going with our renewals and for new stores even though we're not doing a huge amount of new stores, the economics have been pretty good.

但總的來說，我想補充一下邁克所說的，我認為我們對續約和新店的方向非常滿意，儘管我們沒有開設大量新店，經濟效益已經相當不錯了。

The next question is from Jeff Van Sinderen with B. Riley.

下一個問題是 Jeff Van Sinderen 和 B. Riley 提出的。

I want to harp on the weather here. Oh, boy, it's been pretty horrible in California. Just wondering, did you see a better trend in other geographies or maybe weather was not as unseasonable as it's been where you have a big chunk (inaudible).

我想聊聊這裡的天氣。哦，天哪，加州的情況真是太可怕了。只是想知道，您是否在其他地區看到了更好的趨勢，或者天氣可能並不像您所在地區那樣不合時宜（聽不清）。

California was the worst. California was down over 20% in total. All areas were down double digits, though. So it's not like some areas were positive, and there was a mix. Everything was down double digits, and there was a range. Some of the best ones might have been down only 13%, 14% versus California, which was down over 20%. So that broad-based decline, coupled with the weather to me says things are generally slowing down. They're getting tougher out there. And we've heard from a number of companies that they're seeing the same kind of thing. So California was the worst, which does speak to some of the weather issues early in the quarter. And when you look at seasonal performance, as we mentioned in our prepared remarks, the spring/summer categories were more negative than the winter/fall categories. In May, things have gotten a little better than the Q1 trend, but they're still negative other than a couple of areas that we called out. So it's still tough.

加利福尼亞州是最糟糕的。加州整體下跌超過 20%。不過，所有領域的跌幅均達到兩位數。所以並不是說某些領域是積極的，而且有好壞參半。一切都下降了兩位數，而且有一個範圍。一些最好的州可能只下降了 13%、14%，而加州則下降了 20% 以上。因此，廣泛的下降，加上天氣對我來說，一切都在放緩。他們在外面變得越來越強硬。我們從許多公司那裡聽說他們也看到了同樣的情況。所以加州是最糟糕的，這確實說明了本季度初的一些天氣問題。當您查看季節性表現時，正如我們在準備好的評論中提到的那樣，春季/夏季類別比冬季/秋季類別更為負面。五月份的情況比第一季度的趨勢要好一些，但除了我們指出的幾個領域之外，情況仍然是負面的。所以還是很難的。

And then I just wanted to question on Laura. It seems like a terrific hire. When will we actually see a meaningful impact from her? And then maybe also if you could touch on what you think needs to improve with planning and allocation under your new leader there?

然後我只是想問一下勞拉的問題。這似乎是一次很棒的僱傭。我們什麼時候才能真正看到她帶來的有意義的影響？然後，您是否可以談談您認為在新領導領導下的規劃和分配方面需要改進的地方？

Yes. I think -- we'll start to see some real -- I mean obviously, since she just started, she's not going to be able to affect back-to-school in any major ways. But wherever she can or feel like she can tweak the merchandise assortment, she's working on that as we speak. I think that you'll start to see a bigger impact as we move into fall and through a holiday for sure. So I'm really -- already, she's picked up on something opportunities for us, which we'll share more as we -- as she's in the position, we'll share more on future calls for sure.

是的。我認為 - 我們將開始看到一些真實的 - 我的意思是顯然，自從她剛剛開始，她將無法以任何重大方式影響重返校園。但只要她可以或覺得可以調整商品種類，就在我們說話時，她正在努力做到這一點。我認為，當我們進入秋季和假期時，您肯定會開始看到更大的影響。所以我真的——她已經為我們提供了一些機會，我們將在她擔任這個職位時分享更多，我們肯定會在未來的電話會議上分享更多。

Merchandise planning and allocation. We just basically brought in somebody that -- the person that was in that position previously had been with the company for 20 years, really solid employee and stuff. But the person that we brought in is more experienced, multiple types of companies who are mostly apparel. And I see some really positive improvements from some of the methodologies we've had in place for many years. There needs to be some change to what we've been doing in the past. So I see -- the combination of he and Laura, I think, will be a major positive for the company.

商品規劃和分配。我們基本上只是引進了一個人——之前擔任該職位的人已經在公司工作了 20 年，是非常可靠的員工和員工。但我們引進的人更有經驗，工作過多種類型的公司，主要是服裝行業。我看到我們多年來採用的一些方法取得了一些非常積極的改進。我們過去所做的事情需要做出一些改變。所以我認為，我認為他和勞拉的結合將為公司帶來重大積極影響。

Okay. Great. And then I just wanted to touch a little bit on SG&A. I know you guys are always looking for ways to reduce expenses. Just wondering anything there maybe that you're uncovering where you can flex a little bit. Or is it just really a situation where we need to kind of be patient for sales to turn upward? And then just any thoughts on what you think -- I mean, obviously, we've got a really tough macro out there and you're not alone at what you're experiencing. But what do you think needs to happen for sales to turn around? Is it largely macro? Is it we need more, I don't know, more newness or more merchandise content drivers? Or how do you think about that?

好的。偉大的。然後我只想談一點 SG&A。我知道你們一直在尋找減少開支的方法。只是想知道有什麼可能是您正在發現可以稍微彎曲的地方。或者這真的是我們需要耐心等待銷量上升的情況嗎？然後就是你的想法——我的意思是，顯然，我們有一個非常艱難的宏觀環境，你並不孤單地經歷著這樣的事情。但您認為需要怎樣做才能扭轉銷量？主要是宏觀的嗎？我不知道，我們是否需要更多的新鮮感或更多的商品內容驅動力？或者你對此有何看法？

Well, I think there's always -- I think it's more macro than anything else. I actually -- overall, I'm pretty happy with our assortment, but I think the challenges definitely may go. And as I'm sure you've seen from other reported results, we're not alone.

嗯，我認為總是——我認為這比其他任何事情都更宏觀。事實上，總的來說，我對我們的產品種類非常滿意，但我認為挑戰肯定會消失。我相信您已經從其他報告的結果中看到，我們並不孤單。

Yes, on your SG&A question, we run a pretty tight ship here. Ed and I see virtually every expense in this company. So we don't have frivolous multimillion-dollar programs that you can just arbitrarily yank out of the business and not have an impact. As we noted in our remarks about Q1, our store team did a phenomenal job in the first quarter to generate raw dollar savings in store payroll. When you think about year-over-year, we have an 8% average hourly wage increase from minimum wage impacts and wage inflation and having 7 additional stores. That was an outstanding result, but that pressure continues. The average hourly rate is still 8% higher than last year.

是的，關於你的SG&A問題，我們這裡的管理非常嚴格。艾德和我幾乎看到了這家公司的每一項開支。因此，我們不存在無聊的數百萬美元計劃，您可以隨意將其從業務中撤出而不會產生影響。正如我們在第一季度的評論中指出的那樣，我們的商店團隊在第一季度做得非常出色，在商店工資中節省了原始資金。考慮到與去年同期相比，我們的平均時薪因最低工資影響和工資上漲而增加了 8%，並且新增了 7 家商店。這是一個出色的結果，但壓力仍在繼續。平均時薪仍比去年高出8%。

And so we're doing everything we can to be as tight as possible on hours management. We work very closely with our store ops group and our store teams to be as tight on it as we can. Store payroll is roughly 40% of our total SG&A in any given quarter. So that's the nugget that can move the dial. There's not a lot of other wiggle room, to be honest. So bits and pieces here and there, but just like in the first quarter, few things moved a couple of hundred thousand here, a couple of hundred thousand there. But it's not realistic to think that we can just yank several million dollars out of SG&A by snapping our fingers. It's just not realistic.

因此，我們正在盡一切努力盡可能嚴格工時管理。我們與商店運營團隊和商店團隊密切合作，盡可能緊密地合作。在任何特定季度，商店工資大約占我們 SG&A 總額的 40%。這就是可以移動錶盤的金塊。老實說，沒有太多其他迴旋餘地。所以這裡那裡都是零星的，但就像第一季度一樣，很少有東西能在這裡帶動幾十萬，在那裡帶動幾十萬。但認為我們打個響指就可以從 SG&A 中掏出數百萬美元，這是不現實的。這是不現實的。

Okay. Fair enough. I just thought I would ask if there's anything else new you might be in uncovering. We'll pick the rest offline.

好的。很公平。我只是想問一下你是否還有其他新發現。我們將離線挑選其餘的。

The next question is from Mitch Kummetz with Seaport Research.

下一個問題來自 Seaport Research 的 Mitch Kummetz。

Given some of the softness around the seasonal business, you mentioned shorts and swim, Ed. How are you feeling about the inventory that you have? And do you think there's any opportunity for pent-up demand as the weather is turning or has turned or is the macro just too difficult?

考慮到季節性業務的疲軟，您提到了短褲和游泳，Ed。您對現有庫存感覺如何？您認為，隨著天氣的轉變或已經轉變，或者宏觀經濟形勢是否過於困難，被壓抑的需求是否有機會出現？

I feel pretty good about the content itself. I think that the things that we've -- styles that we've sold for many years consistently, there's no major changes to those. I think there will be some pent-up demand for sure. But I also expect it to be extremely promotional in certain categories like shorts and swim, and maybe sandals. It will be extremely price competitive, but we're expecting that, we plan for it.

我對內容本身感覺很好。我認為我們多年來一直銷售的產品風格沒有發生重大變化。我認為肯定會有一些被壓抑的需求。但我也預計它在某些類別（例如短褲和泳裝，也許還有涼鞋）上會具有極大的促銷作用。這將在價格上極具競爭力，但我們對此有所期待，我們也為此做好了計劃。

Okay. And then back to school, you start to see some back-to-school at the tail end of Q2, how are you planning for that? I mean I know that you're lapping, I think, a double-digit negative from last year. And I don't know to what extent you've kind of been able to adjust your plans, just given what you've seen in the macro lately to where you don't end up getting stuck with too much excess inventory through the back-to-school season, kind of. So how are you planning the business? And have you adjusted your buys? I mean have you been able to adjust your buys? If again, that's kind of what you feel like you need to do.

好的。然後回到學校，你開始在第二季度末看到一些返校的情況，你對此有何計劃？我的意思是，我知道你的圈速比去年有兩位數的負數。我不知道你能在多大程度上調整你的計劃，只要考慮到你最近在宏觀上看到的情況，你最終不會陷入後面過多的庫存過剩的境地。 - 上學季節，有點。那麼你是如何規劃業務的呢？您調整購買了嗎？我的意思是你能夠調整你的購買嗎？如果再說一次，這就是你覺得你需要做的事情。

We've adjusted -- we've reforecast our business almost every hour here. So we constantly are adjusting our buying plans and are on order accordingly from what we think is going to happen down the road. So we -- pretty much back-to-school plans, we haven't drastically changed what we thought was going to happen when we did the yearly plans. But we've made some adjustments. And I think we'll be well positioned in categories that are very strong for us like backpacks for -- which is usually a seasonal adjustment for back-to-school, and we're going to be in great shape inventory-wise. And shoes, which has been pretty consistently better than apparel, we'll be in great shape for that. We haven't had to adjust any of those numbers based on what's happening right now.

我們已經進行了調整——我們幾乎每小時都會重新預測我們的業務。因此，我們不斷調整我們的購買計劃，並根據我們認為未來會發生的情況進行相應的訂購。所以我們——幾乎是返校計劃，我們並沒有徹底改變我們在製定年度計劃時所認為的將會發生的事情。但我們做了一些調整。我認為我們將在對我們來說非常強大的類別中佔據有利位置，比如背包——這通常是返校季的季節性調整，而且我們將在庫存方面保持良好狀態。鞋子一直比服裝好，我們將為此做好準備。我們不必根據現在發生的情況調整任何這些數字。

Yes. And Mitch, this is just my own opinion, but -- as I think about the back-to-school season, we are known -- Tilly's is known as the backpack destination having one of the absolute best collections of backpacks there is. I think the back-to-school is much more of a need-based type of period. The kids are going back to school. They've probably grown since last year. There's a need for some wardrobe updating as they go into the next year's school.

是的。米奇，這只是我自己的觀點，但是——正如我想到的返校季節，我們知道——蒂莉被稱為背包目的地，擁有絕對最好的背包系列之一。我認為返校更多的是一個基於需求的時期。孩子們要回學校了。他們可能從去年開始就成長了。當他們進入明年的學校時，需要更新一些衣櫃。

I'm hopeful that despite the challenges that we might continue to face from the environment, it seems like we will be facing these challenges for the foreseeable future, however long that lasts, but the back-to-school season is more of a need-based period, that I'm at least cautiously optimistic that maybe that means we could see a better trend than what we're seeing right now. But honestly, I can't predict the future. Nothing is predictable still for 3 years running now. It is exceptionally difficult to try to predict anything with certainty. But that's how I think about heading into the back-to-school season and having some potential opportunity to see a better run rate in the business hopefully coming soon.

我希望，儘管我們可能繼續面臨環境挑戰，但在可預見的未來，無論持續多久，我們似乎都將面臨這些挑戰，但更需要返校季基於這一時期，我至少持謹慎樂觀的態度，這也許意味著我們可以看到比現在更好的趨勢。但老實說，我無法預測未來。已經連續三年沒有什麼可以預測的了。試圖準確地預測任何事情是極其困難的。但這就是我對進入返校季的看法，並有一些潛在的機會看到業務的更好運行率，希望很快就會到來。

This concludes our question-and-answer session. I would like to turn the conference back over to Ed Thomas for any closing remarks.

我們的問答環節到此結束。我想將會議轉交給埃德·托馬斯（Ed Thomas）發表閉幕詞。

Thank you all for joining us on the call today. We look forward to sharing our second quarter results with you in early September. Have a good evening.

感謝大家今天加入我們的電話會議。我們期待在九月初與您分享我們的第二季度業績。祝你晚上愉快。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。