Why This Undercover Growth Stock's Profits Might Get Squeezed
The coronavirus pandemic created a set of circumstances that rewarded some businesses while punishing others. Nonessential companies were forced to shut their doors, which hurt their competitive prospects. When governments reduced restrictions, it still wasn't business as usual.
The pandemic caused supply chains to slow to a crawl, making it challenging for retailers to secure inventory. Those that did get products on their shelves were rewarded with sales at higher margins. Tilly's (NYSE: TLYS) was fortunate, earning record profits in the quarters following its reopening.
In its first quarter of 2022, which ended on April 1, Tilly's net sales decreased by 10.7%. This comes after sales increased by 111% in the same quarter of the prior year. Consumers were more willing to spend on apparel at the same time last year after receiving stimulus checks from the government. Additionally, more business restrictions were in place during the comparable quarter last year, leaving folks with fewer options on where they could spend their money.
Source Fool.com
