Tilly’s and PacSun both adjusted their earnings guidance for the fourth quarter Thursday after sales during the crucial holiday shopping kicked in later than planned.
The market didn't seem too worried about the news, and both companies stock prices are up in early morning trading today.
Tilly’s said same store sales were lower than expected for the 10-week holiday period, with same store sales falling 1%.
For the total fourth quarter that ends in January, the company had previously said same store sales should rise 1% to 3%. That forecast was lower than its long-term goal of 4% to 5% same store sale growth.
The company said sales were strong during Black Friday weekend and in late December/early January, but were soft in between.
As a result, the company adjusted its Q4 and full year earnings guidance.
Adjusted Q4 net income is expected to now be in the range of $8.1 million to $8.4 million. Previously the company had expected a range of $8.4 million to $9.2 million.
For the year, adjusted earnings per share should be 87 cents to 88 cents vs. the 88 cents to 91 cents range previously given. It was the second time Tilly’s has lowered its earnings range for the year.
Tilly’s said it expects to exit the holiday season with inventory well positioned and that it kept price and brand integrity during the season.
PacSun reported Thursday that Q4 comps to date are up 1%, within its guidance range of 1% down to 3% up.
However, more sales than expected happened during the promotional period of late December than planned, leading to lower margins.
Gross margins are now expected to be in the range of 21% to 22% vs. the previous guidance of 22% to 25%.
The adjusted loss per share is now expected to be in the lower end of the previously given range of 9 cents to 17 cents.
PacSun expects to end the year with positive same store sales and higher gross margins than in 2011.