Tilly's, Inc. (NYSE:TLYS) Q2 2020 Earnings Conference Call - Final Transcript
Sep 03, 2020 • 04:30 pm ET
stores decreased more than 30% collectively.
E-commerce net sales grew by 128% compared to last year's second quarter. The period of store closures that crossed the first and second quarters allowed us to focus solely on e-com inventory management and operations and coupled with our digital first merchandising mindset helped us deliver significant e-com topline growth, improved product margins and operational efficiency and profitability from e-com. We also expanded our ship-from-store capabilities, introduced curbside pickup in selected stores during the quarter, and I've just recently identified five or six stores across the country to be utilized as hub stores for additional e-commerce fulfillment, while in-store activity remained significantly reduced.
In terms of merchandising, all departments comped negative as a result of the various periods of pandemic related store closures this year compared to a normal course of business last year. Women's, men's and footwear were our best performers. Girls, accessories and boys were weakest. Under Tricia's leadership we launched several new brands during the quarter, including BDG by Urban Outfitters, women's Nike, Free People Movement, Luca Sport, Fjallraven, and several new skate brands. We are excited about the prospects for these new brands and we continue to evolve the Tilly's merchandise assortment.
Turning to real estate, we continue to negotiate with our landlords to reach mutually acceptable solutions for rents we have withheld during periods of store closures and we continue to negotiate for reductions in future rent obligations in light of the reduced operating hours and customer traffic restrictions associated with the ongoing pandemic. For the most part we have had thoughtful engagements from our landlords. To date, we have been successful in reaching agreements in principle to address approximately 70% of our total stores. Due to the sensitivity and evolving nature of these discussions, we will not share any particular details for those negotiations other than to say we appreciate the spirit of partnership expressed towards our company by most of our landlords.
In terms of new stores and other capital expenditures, we currently expect to open two new stores during fiscal 2020, with one opening in early October and one opening in mid-November. We sincerely thank those landlords who are understanding about the uncertainties of the current environment and allowed us to defer new store capital expenditures until 2021 for the seven other new stores we had originally planned to open during 2020. We currently expect total capital expenditures for fiscal 2020, including the two new stores and continuing customer facing and other technology investments to be in the range of approximately $8 million to $10 million.
Turning to the third quarter, the back-to-school season is typically our second most important period behind the holiday season for generating sales. We started the third quarter going up against our two largest sales weeks of last year's third quarter, which got us off to a very tough start in terms of comp sales. We also entered into this year's third quarter with the 33 California stores closed that I