Tilly’s Sees Plenty Of Online Growth Potential

The pandemic pushed Tilly’s Inc. (NYSE: TLYS) to quickly invest and improve in e-commerce. Management sees this paying off in the long run.
 
Online sales for the Irvine retailer, with a recent market cap of $380 million, spiked 66.5% in its fiscal fourth quarter ended Jan. 30 and accounted for about a third of the company’s overall sales of $177.9 million in the period.

That share of the overall pie for online is well up from last year, when e-commerce accounted for 19.3% of overall sales.
 
Some might say the surge was the result of the pandemic and its 238 brick-and-mortar stores being closed, but Tilly’s executives think e-commerce will likely hover around the mid-20% range in terms of overall sales even with all stores now open due to the improvements made online.
 
Chief Financial Officer and Executive VP Mike Henry in a call with analysts this month said, “We certainly think [e-commerce is] going to be higher than where we ended fiscal 2019 when it was only 16% of total sales. We don’t think it’s going to revert all the way back down to where it was. I think we made a lot of progress. We’ve invested in technologies and capabilities that we didn’t have two years ago, so we do think it’s going to remain a bigger piece of the business.”
 
CEO and President Ed Thomas described the e-commerce business on the call as underdeveloped going into the pandemic, but “we’ve created a lot of positive momentum in building that business, and I don’t think it’s totally just because the stores closed.
 
“We feel that e-comm will continue to grow in a good way and at a decent pace, even with the stores fully operating,” Thomas said. “This still remains a pretty significant opportunity for that business to become bigger.”