Retailers have been largely facing the brunt of the alarming spread of coronavirus. In response to the pandemic, they have taken measures like closing stores or trimming job hours or permitting employees to work remotely. Recently, Tilly's, Inc. (TLYS - Free Report) announced additional measures in view of the uncertainty surrounding the outbreak.
Apart from shuttering 239 outlets in the United States effective Mar 18, the company has borrowed roughly $23.7 million under its credit facility at an interest rate of 1.7% per year. It also shut down the distribution center in Irvine, CA, and furloughed most of its associates. Meanwhile, the distribution center’s e-commerce will continue to function. Furthermore, management has recognized additional cost reductions for fiscal 2020.
As of Mar 27, Tilly's had cash and investments of about $122.4 million, including the borrowed amount under the credit facility. Moreover, the company cannot ascertain when its stores will reopen. Meanwhile, this Zacks Rank #3 (Hold) company is focused on managing inventories. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tilly's board of directors and management executives have also taken steps to deal with such unprecedented times. The company’s president and chief executive officer has chosen to forgo salary for April. Also, its executive chairman has sacrificed his salary. Moreover, its management team members will have a temporary pay cut immediately, depending on a graduated scale as per annual salary. Also, the board members have chosen to forgo their cash retainer fees. All the aforesaid actions are taken to curb expenditure in such tough times.
Apart from closing down stores, retailers are withdrawing their guidance as they are unable to ascertain the possible impact on costs and revenues. Naming a few, Abercrombie & Fitch (ANF - Free Report) and Nordstrom (JWN - Free Report) withdrew their initial outlook. Moreover, Macy's (M - Free Report) has decided to suspend its second-quarter fiscal 2020 dividend.
In the past three months, shares of Tilly's have plunged 64.7%, compared with the industry’s 44.2% decline.
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