Tilly's, Inc. (NYSE: TLYS) reported Q4 EPS of $0.21, $0.02 better than the analyst estimate of $0.19. Revenue for the quarter came in at $172.5 million versus the consensus estimate of $172.16 million.

Fourth Quarter Results Overview

The following comparisons refer to operating results for the fourth quarter of fiscal 2019 versus the fourth quarter of fiscal 2018 ended February 2, 2019:

• Total net sales were $172.5 million, an increase of $1.9 million or 1.1%, compared to $170.6 million last year. The Company ended the quarter with 240 total stores, including one RSQ-branded pop-up store, compared to 229 total stores, including four RSQ-branded pop-up stores, last year.
• Comparable store net sales, which includes e-commerce net sales, decreased 2.0% compared to last year's increase of 6.4%. Comparable store net sales in physical stores decreased 2.2% and represented approximately 80.7% of total net sales, compared to a decrease of 0.9% and an 80.3% share of total net sales last year. E-commerce net sales decreased 1.2% and represented approximately 19.3% of total net sales, compared to an increase of 49.6% and a 19.7% share of total net sales last year.
• Gross profit was $52.1 million, or 30.2% of net sales, compared to $52.2 million, or 30.6% of net sales last year. Product margins decreased 20 basis points as a percentage of net sales due to increased markdowns. Occupancy costs deleveraged 70 basis points as a percentage of net sales, primarily due to opening 11 net new stores compared to last year and the negative comparable store net sales result. Distribution costs improved 50 basis points primarily due to lower e-commerce shipping charges compared to last year.
• Selling, general and administrative expenses ("SG&A") were $43.6 million, or 25.3% of net sales, compared to $41.2 million, or 24.2% of net sales, last year. The $2.4 million increase in SG&A was primarily due to higher store payroll expenses of approximately $1.5 million resulting from minimum wage increases and store count growth, higher worker\\'s compensation claims reserves of $0.8 million, and higher marketing expenses of approximately $0.4 million primarily relating to e-commerce. These expense increases were partially offset by lower corporate bonus provisions of $1.2 million compared to last year. Last year\'s SG&A also included $0.9 million in expense reductions related to negotiated resolutions of certain vendor disputes.
• Operating income was $8.5 million, or 4.9% of net sales, compared to $10.9 million, or 6.4% of net sales, last year. The $2.4 million decrease in operating income was primarily due to the net SG&A increase noted above relative to net sales growth noted above.
• Income tax expense was $2.8 million, or 30.9% of pre-tax income, compared to $3.1 million, or 26.4% of pre-tax income, last year. Income tax expense for fiscal 2019 includes approximately $0.5 million of discrete items related to the acceleration and expiration of certain employee stock options.
• Net income was $6.3 million, or $0.21 per diluted share, compared to $8.7 million, or $0.29 per diluted share, last year.

"A deeper than expected drop in store traffic and comparable store net sales during the second and third weeks of December resulted in a disappointing fourth quarter overall, which was our first negative comp quarter in over three and a half years," commented Ed Thomas, President and Chief Executive Officer. "Comparable store net sales are off to a positive start thus far in the first quarter of fiscal 2020. However, due to the uncertainty of the potential near-term impacts of the coronavirus situation, we are unable to provide specific earnings guidance at this time."

Fiscal 2020 First Quarter Outlook

Through March 10, 2020, total comparable store net sales, including e-commerce, have increased by a low single-digit percentage with comparable store net sales in stores slightly negative and e-commerce net sales up high single-digits on a percentage basis. Given the unpredictability of the effects of the coronavirus on, among other things, consumer behavior, store traffic, production capabilities, timing of deliveries, our people, economic activity and the market generally in the coming weeks and months, the Company is unable to provide specific earnings guidance at this time.

For earnings history and earnings-related data on Tilly's, Inc. (TLYS) click here.