The coronavirus pandemic sent millions of students home from school in March of 2020, and many have been learning remotely ever since. Some states brought back students for in-person learning already, but for many, this will be their first return since the initial onset of the pandemic. 

That may make this back-to-school season the most epic ever. Parents and kids gearing up for a return to school after a 15-month hiatus will likely need more supplies than usual. My top back-to-school stock is an apparel retailer ready to capture that pent-up demand. 

An adult getting a smiling child ready for school.

Tilly's is trading at a forward price-to-earnings ratio of under 12. Image source: Getty Images.

Conservative growth 

Tilly's (TLYS -1.34%) is a relatively small retailer, with just 244 stores open in 33 states. It's one of the few brick-and-mortar apparel retailers with plans to grow its store base over time. It could be met with favorable rent prices in the aftermath of the pandemic. Many of its competitors are closing stores, which should leave plenty of rental space for Tilly's to choose from at agreeable terms.

During the pandemic, its e-commerce channel carried the weight, but now, as stores reopen, the balance is shifting in favor of its retail stores. As a percentage of overall sales, online sales decreased to 21.7% in fiscal Q1 2021 from 39.2% the previous year. The company offers free shipping only on orders over $49. Otherwise, shoppers have to pay at least $5.95 for shipping. This policy helps with the profit margin from online sales. 

Tilly's has a pristine balance sheet, with $157 million in cash, marketable securities, and no debt. With 30 million shares outstanding, the company has roughly $5 per share in cash and marketable securities. The stock is trading at around $15 per share. So roughly one-third of the stock's value is in cash. That's money the company can use to open new stores or pay out a special dividend, as it has done in the previous three years.

Pent-up demand

The bulk of the company's stores are in California, the state that has had some of the most severe COVID-19 preventative measures, including remote learning for many of its students. The pent-up demand for back-to-school clothing is arguably the largest in California. In a normal back-to-school season, students have been out of school for three months. This back-to-school season could return students who were away for nearly a year and a half. 

When you are away from school for a few months, there are items you can use from before the summer break. Your shoes probably still fit, you haven't outgrown pants, and the trending styles have not changed all that much. That will not be the case this year. 

Remember, as part of a stimulus package passed earlier this year, parents of children under 17 years old that meet income requirements are getting $250 to $300 per child per month in federal stimulus, which they can use to buy the items their kids need, and maybe even some that they want but don't need. 

The stock is trading at an inexpensive forward price-to-earnings ratio of 11.39. With Tilly's, investors get a low-risk stock with upside potential.