Tillys Inc (TLYS) 2024 Q2 法說會逐字稿

Good day, and welcome to the Tilly's, Inc., second-quarter 2024 results conference call. (Operator Instructions) Please note this event is being recorded.

美好的一天，歡迎參加 Tilly's, Inc. 2024 年第二季業績電話會議。（操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to Gar Jackson, Investor Relations. Please go ahead.

我現在想將會議交給投資者關係部門的 Gar Jackson。請繼續。

Good afternoon, and welcome to the Tilly's fiscal 2024 second-quarter earnings call. Michael Henry, Executive Vice President and Chief Financial Officer, will discuss the company's business and operating results. Then he and Hezy Shaked, Executive Chairman and Interim President and Chief Executive Officer, will host a Q&A session with analysts.

下午好，歡迎參加 Tilly 2024 財年第二季財報電話會議。執行副總裁兼財務長麥可·亨利將討論公司的業務和經營績效。然後，他和執行董事長兼臨時總裁兼執行長 Hezy Shaked 將主持分析師問答環節。

For a copy of Tilly's earnings press release, please visit the Investor Relations section of the company's website at tillys.com. 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.

如需 Tilly 收益新聞稿的副本，請造訪該公司網站tillys.com 的投資者關係部分。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。

Certain forward-looking statements will be made during this call that reflect Tilly's judgment and analysis only as of today, September 5, 2024, 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.

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 截至今天（2024 年9 月5 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 2024 second-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，請參閱我們今天透過表格 8 向 SEC 提供的 2024 財年第二季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 one hour and will include a Q&A session after our prepared remarks.

今天的電話會議僅限一小時，在我們準備好的發言後將包括問答環節。

I now turn the call over to Mike.

我現在把電話轉給麥克。

Thanks, Gar. Good afternoon, and thanks to all for joining us today. Our second-quarter net sales were in the middle of our outlook range provided during our first quarter earnings call in early June, and our breakeven earnings per share beat our outlook range. Although our comparable net sales remained negative, this was our best quarterly comp sales result since the end of fiscal 2021.

謝謝，加爾。下午好，感謝大家今天加入我們。我們第二季的淨銷售額處於 6 月初第一季財報電話會議期間提供的預期範圍的中間，並且我們的每股盈虧平衡收益超出了我們的預期範圍。儘管我們的可比淨銷售額仍然為負，但這是自 2021 財年末以來我們最好的季度可比銷售業績。

While the macroeconomic environment remains challenging for our core customer demographic of teens, young adults, and young families, we also believe certain merchandising decisions on our part limited us from performing better in the second quarter. We have been working to correct those issues going forward.

雖然宏觀經濟環境對我們的青少年、年輕人和年輕家庭等核心客戶群來說仍然充滿挑戰，但我們也認為，我們的某些行銷決策限制了我們在第二季取得更好的表現。我們一直在努力糾正這些問題。

While sales growth has been elusive for us, we are encouraged by our ability to have produced improved product margins for each of the first two quarters of fiscal 2024 relative to last year's results, which we believe suggests that our revised pricing strategies and assortment adjustments are beginning to gain traction.

雖然我們的銷售成長一直難以實現，但我們對 2024 財年前兩個季度的產品利潤率相對於去年業績有所提高的能力感到鼓舞，我們認為這表明我們修訂後的定價策略和品種調整是開始獲得關注。

As we continue to challenge ourselves to find ways to drive better sales results, we have refocused our marketing efforts with the primary goal of giving consumers a reason to care about and choose Tilly's. We have established a new brand marketing strategy to redefine our purpose to our target customer. Our team has implemented this strategy across our social media content, curating a roster of micro influencers to help grow our following, and expanding our brand reach into new online media platforms.

隨著我們不斷挑戰自我，尋找提高銷售業績的方法，我們重新調整了行銷工作的重點，主要目標是讓消費者有理由關心和選擇 Tilly's。我們制定了新的品牌行銷策略，以重新定義我們對目標客戶的目標。我們的團隊在我們的社群媒體內容中實施了這項策略，策劃了一系列微型影響者，以幫助擴大我們的追隨者，並將我們的品牌影響力擴展到新的線上媒體平台。

Additionally, in late July, we launched our first-ever brand campaign with the tagline of Discover Your Style. Through this campaign, we are emphasizing the importance of personal style as a driving force towards confidence and mental wellness. In Tilly's' 42 years of existence, we have always cared deeply about the communities we serve. We have continuously supported the Tilly's Life Center foundation, whose focus is teen mental health and well-being, since its inception 12 years ago.

此外，7 月下旬，我們推出了首個品牌活動，口號是「發現您的風格」。透過這次活動，我們強調個人風格作為自信和心理健康驅動力的重要性。在 Tilly 的 42 年歷史中，我們始終深切關心我們所服務的社區。自 12 年前成立以來，我們一直持續支持蒂莉生命中心基金會，該基金會的重點是青少年心理健康和福祉。

We are now acting on an opportunity to begin a direct conversation with our customers to express who we are and what we are about, which is something we've never really done in the past. Our campaign is rooted in the core values of confidence, self-expression, California Shine, and positivity, which we believe can help us build connection and trust with our consumer community in new and different ways than solely providing products that we think they want. We are proud of what this campaign says about us and our demonstrated commitment to our customers' well-being.

我們現在正在抓住機會開始與客戶直接對話，以表達我們是誰以及我們的目的，這是我們過去從未真正做過的事情。我們的活動植根於自信、自我表達、加州光芒和積極性的核心價值觀，我們相信這些價值觀可以幫助我們以新的、不同的方式與消費者社區建立聯繫和信任，而不僅僅是提供我們認為他們想要的產品。我們為這次活動所展現的關於我們的內容以及我們對客戶福祉所表現出的承諾感到自豪。

The full impact of this campaign won't be known for some time, and it will continue to evolve, but we've been excited to see the positive response to the campaign across all of our digital platforms since launch. We are hopeful that this campaign can be the beginning of creating stronger consumer affinity and following for Tilly's, and together with our other initiatives, lead to better results over time.

該活動的全部影響在一段時間內尚不得而知，並且它將繼續發展，但我們很高興看到自推出以來我們所有數位平台對該活動的積極響應。我們希望這次活動能夠成為為 Tilly's 創造更強的消費者親和力和追隨者的開始，並與我們的其他舉措一起，隨著時間的推移帶來更好的結果。

Turning to our operating results for the second quarter of fiscal 2024 compared to last year's second quarter. Net sales were $162.9 million, an increase of 1.8%, primarily due to the impact of the 53rd week in last year's retail calendar, which resulted in a timing shift of back-to-school sales volume, pulling a large sales week into the end of the second quarter this year from what was in the start of the third quarter last year.

轉向我們 2024 財年第二季與去年第二季相比的營運表現。淨銷售額為 1.629 億美元，成長 1.8%，主要是由於去年零售日曆第 53 週的影響，導致返校銷售量的時間轉移，將大銷售週拉到了最後與去年第三季度初相比，今年第二季的情況有所改善。

Net sales from physical stores increased by 2% and represented 81.3% of total net sales compared to 81.1% last year. E-com net sales increased by 1.3% and represented 18.7% of total net sales compared to 18.9% last year. Comparable net sales for the 13-week period ended August 3, 2024, including both physical stores and e-com, compared to the 13-week period ended August 5, 2023, last year, decreased by 7.8%. We ended the second quarter with 247 total stores compared to 246 total stores at the end of the second quarter last year.

實體店淨銷售額成長 2%，佔總淨銷售額的 81.3%，而去年為 81.1%。電子商務淨銷售額成長 1.3%，佔總淨銷售額的 18.7%，而去年為 18.9%。截至2024年8月3日的13週期間的可比淨銷售額（包括實體店和電子商務）與去年截至2023年8月5日的13週期間相比下降了7.8%。截至第二季末，我們的門市總數為 247 家，而去年第二季末的門市總數為 246 家。

Gross margin, including buying, distribution, and occupancy expenses, improved by 300 basis points to 30.7% of net sales from 27.7% of net sales last year. Product margins improved by 270 basis points due to a combination of improved initial markups and lower total markdowns. Buying, distribution, and occupancy costs improved by 30 basis points, primarily due to carrying these costs against a higher level of net sales this year.

包括購買、分銷和占用費用在內的毛利率從去年佔淨銷售額的 27.7% 提高了 300 個基點，達到淨銷售額的 30.7%。由於初始加價提高和總降價降低，產品利潤率提高了 270 個基點。購買、分銷和占用成本改善了 30 個基點，主要是由於今年淨銷售額較高，因此將這些成本納入考慮範圍。

Total SG&A expenses were $50.8 million or 31.2% of net sales compared to $47 million or 29.4% of net sales last year. Primary SG&A increases were from store payroll and related benefits of $1.5 million, 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.

SG&A 費用總額為 5,080 萬美元，佔淨銷售額的 31.2%，而去年為 4,700 萬美元，佔淨銷售額的 29.4%。主要的 SG&A 成長來自 150 萬美元的商店薪資和相關福利、70 萬美元的數位行銷費用、60 萬美元的軟體即服務費用以及 50 萬美元的企業薪資和相關福利。

Pretax loss was $73,000 (sic - see press release, "$0.1 million") or breakeven as a percentage of net sales compared to last year's pretax loss of $1.5 million or 0.9% of net sales. Income tax benefit was $4,000 (sic - see press release, "$4,500") or 6.2% of pretax loss compared to a benefit of $0.3 million or 23.2% of pretax loss last year. The lower income tax rate this year was attributable to immaterial state tax benefits arising in the quarter with near breakeven pretax results. Net loss was $69,000 (sic - see press release, "$0.1 million") or breakeven on a per share basis compared to last year's net loss of $1.1 million or $0.04 per share.

稅前虧損為 73,000 美元（原文如此，請參閱新聞稿，「10 萬美元」）或損益平衡佔淨銷售額的百分比，而去年稅前虧損為 150 萬美元，佔淨銷售額的 0.9%。所得稅福利為 4,000 美元（原文如此 - 請參閱新聞稿，「4,500 美元」）或稅前損失的 6.2%，而去年的福利為 30 萬美元或稅前損失的 23.2%。今年所得稅率較低的原因是該季度產生的國家稅收優惠微乎其微，稅前業績接近收支平衡。每股淨虧損為 69,000 美元（原文如此 - 請參閱新聞稿，「10 萬美元」），即每股損益平衡，而去年的淨虧損為 110 萬美元，即每股 0.04 美元。

Turning to our balance sheet. We ended the second quarter with total cash and marketable securities of approximately $77 million and no borrowings under our asset-backed credit facility. We ended the second quarter with net inventories up 4.1%, amid the peak in the back-to-school season. Total capital expenditures for the first half were $4.6 million.

轉向我們的資產負債表。截至第二季末，我們的現金和有價證券總額約為 7,700 萬美元，且我們的資產支持信貸安排下沒有借款。第二季末，我們的淨庫存成長了 4.1%，正值返校季高峰期。上半年資本支出總額為 460 萬美元。

Turning to the third quarter of fiscal 2024. Comparable net sales for fiscal August increased by 1%, which was our first positive monthly comp since February 2022. While that result is encouraging, it should be noted that for each of the past three fiscal years, fiscal August has produced our best comp sales performance in the third quarter followed by a significant slowing in our business relative to August during each of September and October. We expect a similar trend pattern this year.

轉向2024財年第三季。8 財年的可比淨銷售額成長了 1%，這是我們自 2022 年 2 月以來首次實現月度正成長。雖然這一結果令人鼓舞，但應該指出的是，在過去三個財年中，八月財年在第三季度創造了我們最好的銷售業績，隨後在九月和十月期間，我們的業務相對於八月顯著放緩。我們預計今年也會出現類似的趨勢模式。

Now, as we have discussed during each of our past two earnings calls, the impact of the 53rd week in last year's retail calendar created a timing shift of back-to-school sales volume into the end of the second quarter this year from what was at the start of the third quarter last year. As a result of this timing shift, total net sales for the comparable third quarter this year start with an $18.4 million deficit versus last year before considering comparable net sales changes.

現在，正如我們在過去兩次財報電話會議中所討論的那樣，去年零售日曆中第 53 週的影響導致返校銷量從原來的時間轉移到了今年第二季度末。由於這一時間轉變，在考慮可比淨銷售額變化之前，今年第三季的總淨銷售額與去年相比出現了 1,840 萬美元的赤字。

Based on these factors and other current and historical trends, we currently expect the following for our fiscal 2024 third-quarter operating results: total net sales to be in the range of approximately $140 million to $146 million, translating to a comparable net sales decline in the range of 6% to 2%, respectively; SG&A to be approximately $49 million before factoring in any potential noncash store asset impairment charges which may arise; pretax 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 noncash valuation allowance on our deferred tax assets; loss per share to be in the range of $0.39 to $0.29, respectively, based on estimated weighted average shares of approximately 30 million.

基於這些因素以及其他當前和歷史趨勢，我們目前預計 2024 財年第三季的經營業績如下：總淨銷售額將在約 1.4 億至 1.46 億美元之間，這意味著可比淨銷售額下降範圍分別為6%至2%；在考慮可能產生的任何潛在非現金商店資產減損費用之前，SG&A 約為 4,900 萬美元；稅前虧損和淨虧損分別約為 1,160 萬美元至 870 萬美元，由於全額非現金估值備抵對我們的遞延稅資產的持續影響，有效所得稅率接近零；根據估計加權平均股數約為 3,000 萬股，每股虧損將分別在 0.39 至 0.29 美元之間。

We expect to have 246 total stores open at the end of the third quarter, a net decrease of three from the end of last year's third quarter. During the fourth quarter, we currently expect to open two new stores and close five unprofitable stores. The number of store closures may likely grow in connection with some natural lease expirations occurring at the end of the fiscal year and depending on the outcome of pending lease renewal discussions. Each decision we make will be rooted in maximizing profitability going forward.

我們預計第三季末新開店總數為 246 家，比去年第三季末淨減少 3 家。在第四季度，我們目前預計將開設兩家新店並關閉五家不盈利的門市。由於本財政年度結束時發生的一些自然租約到期，以及待續租討論的結果，商店關閉的數量可能會增加。我們所做的每一個決定都將植根於未來獲利能力的最大化。

In closing, as we said before, we continue to believe it will be challenging for us to improve our sales results in the current consumer environment, but we will continue to challenge ourselves to adapt and improve. We are bringing in new product collaborations, such as our recently launched partnership with NASCAR, as an example. We are introducing several new brands over the back half of the fiscal year, aiming to create new customer interest and sales opportunities.

最後，正如我們之前所說，我們仍然相信在當前的消費環境下提高銷售業績對我們來說將是一個挑戰，但我們將繼續挑戰自己以適應和改進。我們正在引入新的產品合作，例如我們最近與 NASCAR 建立的合作夥伴關係。我們將在本財年後半段推出幾個新品牌，旨在創造新的客戶興趣和銷售機會。

We'll continue to work at connecting more deeply with our customers in authentic ways and invest in the opportunities that we see to improve our business. Our goal remains to return to generating net sales growth, profitability, and shareholder value, which will take time with the headwinds we are currently facing, but we are making every effort to get there as soon as we reasonably can.

我們將繼續努力以真實的方式與客戶建立更深入的聯繫，並投資我們看到的改善業務的機會。我們的目標仍然是恢復淨銷售額成長、獲利能力和股東價值，考慮到我們目前面臨的不利因素，這需要時間，但我們正在盡一切努力盡快實現這一目標。

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) Bruce Geller, Geller ventures.

（操作員說明）布魯斯·蓋勒（Bruce Geller），蓋勒創投公司。

Hey, good afternoon. Looking back at this company pre-COVID, it was a very consistent company, fairly profitable, strong cash flow generation. And there were times where you went through a rough patch like the one you have recently, but you always came out of it strong and got back to normalized levels. That doesn't seem to have happened this time around. So can you please describe what has changed structurally in the business that is preventing this from happening?

嘿，下午好。回顧新冠疫情之前的這家公司，它是一家非常穩定的公司，獲利能力相當，現金流強勁。有時你會經歷像最近這樣的艱難時期，但你總是能堅強地走出困境並回到正常水平。這次似乎沒有發生這種情況。那麼，您能否描述一下業務結構上發生的哪些變化阻止了這種情況的發生？

I'll take this call. This is Hezy. Several things. Number one, if you look at the record of the last three years or so, it was declining sales year after year, besides '21, which was a weird year for everybody. A lot of it -- and we are based in Orange County, California. A lot of it had to do with the pandemic and the changes in behavior of employees, et cetera. We addressed all that stuff since I came in, but there's a lot of work to do in order to get it back on track to where we were.

我會接這個電話。這是赫齊。有幾件事。第一，如果你看看過去三年左右的記錄，除了 21 年之外，銷量逐年下降，這對每個人來說都是奇怪的一年。其中很多——我們的總部位於加州橘郡。其中很大一部分與疫情和員工行為的變化等有關。自從我進來以來，我們解決了所有這些問題，但為了讓它回到原來的軌道，還有很多工作要做。

But it seems like something more structural has changed, because you guys don't seem to be able to break out of the funk that you've been able to do so historically. And you're also talking about a very difficult consumer environment, which it is. However, there are plenty of comparable consumer apparel retailers that are doing just fine right now. So it seems like, again, there's something more structural, which is what I'm really trying to gain a grasp of.

但似乎結構性的東西已經發生了變化，因為你們似乎無法擺脫歷史上能夠做到的恐懼。您還談論了一個非常困難的消費環境，事實確實如此。然而，有許多類似的消費服飾零售商目前表現良好。所以，似乎又存在一些更具結構性的東西，這正是我真正想要掌握的。

Yeah. I can say that it's something specific I can tell you. I can tell you that many decisions we've made in the past didn't work out. Now, we have to change them; it's including systems, et cetera. But it's not one thing that is broken. There was a lot of things that we had to address, and we are. And like any situation that happened before, it takes time to turn it around.

是的。我可以說我可以告訴你一些具體的事情。我可以告訴你，我們過去所做的許多決定都沒有成功。現在，我們必須改變它們；它包括系統等等。但這並不是一件事被打破了。有很多事情我們必須解決，而且我們確實正在解決。就像以前發生的任何情況一樣，扭轉局面需要時間。

Yeah, the two things I'll add for you. Pardon me, I've got allergy issues going on. Obviously, our sales per square foot in store have dropped quite significantly since 2019, so that's the first structural issue, which Hezy has been addressing. And other primary thing is really the cost of labor.

是的，我會為你添加兩件事。請原諒，我有過敏問題。顯然，自 2019 年以來，我們店內每平方英尺的銷售額大幅下降，因此這是 Hezy 一直在解決的第一個結構性問題。其他主要的事情實際上是勞動成本。

So when you compare back to 2019, before the pandemic, our average hourly rate for store payroll is 32% higher than it was in 2019, strictly because of all the minimum wage increases that have taken place all over the country. But predominantly in California, where for several years in a row, it went up $1 per hour per year. This most recent year was $0.50, and almost half of our stores are in the state of California, so a really big hit there when you think about a 32% higher average rate for store payroll with sales that are not higher than they were in 2019. That's a big disconnect. And we manage store payroll extremely tightly every single week, but those are the facts. The minimum wage impact is tremendous.

因此，與疫情爆發前的 2019 年相比，我們商店的平均每小時工資比 2019 年高出 32%，這完全是因為全國各地都提高了最低工資。但主要是在加州，該州的每小時每小時連續幾年上漲 1 美元。最近一年的價格為0.50 美元，而且我們幾乎一半的商店都位於加利福尼亞州，因此，當您考慮到商店工資單平均費率高出32%，且銷售額不高於2019 年時，這確實是一個巨大的打擊。這是一個很大的脫節。我們每週都非常嚴格地管理商店工資，但這些都是事實。最低工資的影響是巨大的。

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

我們的問答環節到此結束。我想將會議轉回邁克爾·亨利發表閉幕詞。

Well, thank you all for joining us. Have a good evening. We look forward to sharing our third-quarter results with you in early December. Thank you very much.

好的，謝謝大家加入我們。祝你晚上愉快。我們期待在 12 月初與您分享我們的第三季業績。非常感謝。

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。您現在可以斷開連線。