Tilly's, Inc. (NYSE:TLYS) Q2 2020 Earnings Conference Call - Final Transcript

Sep 03, 2020 • 04:30 pm ET


Tilly's, Inc. (NYSE:TLYS) Q2 2020 Earnings Conference Call - Final Transcript


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Greetings. Welcome to Tilly's Incorporated Second Quarter 2020 Earnings Results Conference Call. [Operator Instructions]

I will now turn the conference over to your host, Gar Jackson. You may begin.

Gar Jackson

Good afternoon and welcome to the Tilly's fiscal 2020 second quarter earnings call.

Ed Thomas, President and CEO and Michael Henry, CFO, will discuss the Company's results and then host the Q&A session. 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.

Certain forward-looking statements will be made during this call that reflect Tilly's judgment and analysis only as of today, September 3, 2020 and actual results may differ materially from current expectations based on various factors affecting Tilly's business, including impacts of and the Company's actions in response to the current COVID-19 pandemic. Accordingly, you should not place undue reliance on these forward-looking statements.

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 2020 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.

Today's call will be limited to one hour and will include a Q&A session after our prepared remarks.

I now will turn the call over to Ed.

Edmond Thomas

Thanks, Gar. Good afternoon, everyone and thank you for joining us today.

I want to kick off today's call by thanking our entire Tilly's team for their hard work combating this unprecedented and unpredictable COVID-19 environment. I'm very proud of everyone's effort fighting the unexpected challenges that we have faced together as we approach the six-month mark of the pandemic's severe impact on our business.

Turning to the second quarter, it began with all 239 of our stores closed for the first two weeks of the quarter. Beginning on May 15 and continuing through July, early July, we reopened all but four of our stores in a phased approach with new health protocols, customer traffic restrictions and reduced operating hours in place. Then on July 13, our home state of California ordered the closure of indoor malls. For the remainder of the quarter 33 of our 98 California stores, which are some of our more productive stores, were closed.

Despite these complications, our second quarter results were better than we had anticipated. Total net sales for the second quarter decreased by 16% compared to last year. Net sales from physical stores including all periods of store closures and net sales from new stores not yet open a full year decreased 39.6% compared to last year's second quarter. Comparable net sales from reopened stores declined 18% collectively during the second quarter following their respective reopening dates compared to last year, while customer traffic in reopened