TLYS stock closed up 13% in after-hours trading on December 4, 2019, on a solid earnings report. What’s crazy too is that the stock trades at a P/S ratio of 0.5!
Tilly’s reports Q3 adjusted EPS of 23c, the consensus was 21c. The company reports Q3 revenue of $154.8M, the consensus was $154.53M. Comparable store net sales, which includes e-commerce net sales, increased 3.1% compared to last year’s third quarter increase of 4.3%. Comparable store net sales in physical stores increased 2.4% and represented approximately 85.3% of total net sales, compared to an increase of 1.3% and an 85.5% share of total net sales last year. E-commerce net sales increased 7.4% and represented approximately 14.7% of total net sales this year, compared to an increase of 26.7% and a 14.5% share of total net sales last year.
“Tillys continued its positive momentum with its 14th consecutive quarter of flat to positive comparable store net sales during the third quarter, including positive comps from both stores and e-commerce, all merchandising departments, and each month of the quarter,” commented Ed Thomas, President and Chief Executive Officer. “Based on our results during Thanksgiving weekend through Cyber Monday, we believe we are well positioned to continue our momentum during the Holiday season.”
Revenue has been growing by 3.29% on average over the past 5 years.
We are on the fence about adding TLYS to the GST Portfolio. The main problem is that it’s tied to consumers and if the economy continues to weaken as evidenced by the Fed’s rate cuts, this consumer name will get hammered. The fear of this very thing probably explains a little of why the stock is so cheap. The other thing is Amazon. Being a competitor to Amazon is a losing proposition for most retailers.
Disclosure: We do not hold any position in TLYS stock.