Tilly’s, Inc. reported earnings in the second quarter that topped forecasts, although same-store sales were down 4.1 percent, reaching the lower end of guidance.

Earnings in the period ended August 2 reached 10 cents a share against guidance calling for earnings ranging from a loss of 9 cents to earnings of 7 cents. The 4.1 percent comp decline compares with guidance in the range of negative 5 percent to flat.

“We believe we are beginning to see the positive impacts of our efforts to stabilize our business. Our comparable net sales trend has improved each quarter since the end of fiscal 2024, including through fiscal August to begin the third quarter,” commented Hezy Shaked, co-founder and executive chairman. “I am excited to welcome Nate Smith to Tillys as our new Chief Executive Officer, and I look forward to working with him and our team as we seek to continue building upon our progress made thus far toward generating improved sales results and profitability over time.”

Fiscal 2025 Second Quarter Operating Results Overview
The following comparisons refer to the company’s operating results for the second quarter of fiscal 2025, ended August 2, 2025, versus the second quarter of fiscal 2024, ended August 3, 2024.

  • Total net sales were $151.3 million, representing a 7.1 percent decrease. Total comparable net sales, including both physical stores and e-commerce (e-com), decreased by 4.5 percent.
  • Net sales from physical stores were $122.7 million, a decrease of 7.3 percent. The company ended the second quarter with 232 total stores, a decrease of 15 stores or 6.1 percent, compared to 247 total stores at the end of the second quarter last year. Comparable store net sales decreased 4.1 percent relative to the comparable 13-week period ended August 3, 2024. Net sales from physical stores represented 81.1 percent of total net sales this year compared to 81.3 percent of total net sales last year.
  • Net sales from e-commerce were $28.5 million, a decrease of 6.6 percent. E-com net sales decreased 6.2 percent relative to the comparable 13-week period ended August 3, 2024. E-com net sales represented 18.9 percent of total net sales this year compared to 18.7 percent of total net sales last year.
  • Gross profit, including buying, distribution, and occupancy costs, was $49.1 million, or 32.5 percent of net sales, compared to $49.9 million, or 30.7 percent of net sales, last year. Product margins improved by 210 basis points, primarily due to the combination of higher initial markups and lower markdowns resulting from operating with reduced, more current inventory. Buying, distribution, and occupancy costs deleveraged by 30 basis points collectively, despite being $2.4 million lower than last year, primarily due to the fact that these costs were carried against a lower level of net sales this year. Occupancy costs decreased by $1.7 million, primarily due to operating 15 fewer net stores compared to last year. Distribution costs decreased by $0.6 million, primarily due to reduced temporary labor expenses.
  • Selling, general and administrative (“SG&A”) expenses were $46.4 million, or 30.7 percent of net sales, compared to $50.8 million, or 31.2 percent of net sales, last year. The $4.4 million decrease in SG&A was primarily attributable to decreases in store payroll and related benefits of $1.9 million, non-cash asset write-down charges of $0.7 million, e-com fulfillment temporary labor of $0.5 million, and corporate payroll and related benefits of $0.4 million, among other items.
  • Operating income was $2.7 million, or 1.8 percent of net sales, compared to an operating loss of $0.9 million, or 0.5 percent of net sales, last year, due to the combined impact of the factors noted above.
  • Income tax benefit was $41 thousand, or (1.3) percent of pre-tax income, compared to an income tax benefit of $4 thousand, or 6.2 percent of pre-tax loss, last year. Both years’ income tax results include the continuing impact of a full, non-cash deferred tax asset valuation allowance. This year’s income tax benefit includes the refund of certain income tax credit carryforwards and state income tax carryback claims.
  • Net income was $3.2 million, or 10 cents per diluted share, compared to net loss of $0.1 million, or $0.00 per share, last year. Weighted average diluted shares were 30.3 million this year compared to 30.0 million shares last year.

Fiscal 2025 First Half Operating Results Overview
The following comparisons refer to the company’s operating results for the first half of fiscal 2025, ended August 2, 2025, versus the first half of fiscal 2024, ended August 3, 2024.

  • Total net sales were $258.9 million, a decrease of 7.1 percent. Total comparable net sales, including both physical stores and e-commerce (“e-com”), decreased by 5.5 percent.
  • Net sales from physical stores were $208.6 million, a decrease of 7.3 percent. Comparable store net sales decreased 5.3 percent relative to the comparable 26-week period ended August 3, 2024. Net sales from physical stores represented 80.6 percent of total net sales this year compared to 80.8 percent of total net sales last year.
  • Net sales from e-commerce were $50.2 million, a decrease of 6.3 percent. E-com net sales decreased 6.4 percent relative to the comparable 26-week period ended August 3, 2024. E-com net sales represented 19.4 percent of total net sales this year compared to 19.2 percent of total net sales last year.
  • Gross profit, including buying, distribution, and occupancy costs, was $70.4 million, or 27.2 percent of net sales, compared to $74.2 million, or 26.6 percent of net sales, last year. Product margins improved by 140 basis points, primarily due to higher initial markups and lower markdowns resulting from operating with reduced, more current inventory. Buying, distribution, and occupancy costs deleveraged by 80 basis points collectively, despite being $3.2 million lower than last year, primarily due to carrying these costs against a lower level of net sales this year. Occupancy costs decreased by $2.7 million, primarily due to operating 15 fewer net stores compared to last year.
  • Selling, general and administrative (“SG&A”) expenses were $90.4 million, or 34.9 percent of net sales, compared to $95.9 million, or 34.4 percent of net sales, last year. The $5.5 million decrease in SG&A was primarily attributable to decreases in store payroll and related benefits of $2.9 million and non-cash asset write-down charges of $1.2 million, among other items.
  • Operating loss was $20.0 million, or 7.7 percent of net sales, compared to $21.6 million, or 7.8 percent of net sales, last year, due to the combined impact of the factors noted above.
  • Income tax benefit was $0.2 million, or 0.9 percent of pre-tax loss, compared to $17 thousand, or 0.1 percent of pre-tax loss, last year. Both years’ income tax results include the continuing impact of a full, non-cash deferred tax asset valuation allowance. This year’s income tax benefit also includes the refund of certain income tax credit carryforwards and state income tax carryback claims.
  • Net loss was $19.0 million, or 63 cents per share, compared to $19.7 million, or 66 cents per share, last year. Weighted average shares were 30.1 million this year compared to 30.0 million shares last year.

Balance Sheet and Liquidity
As of August 2, 2025, the company had total available liquidity of $113.7 million, comprising $50.7 million in cash and cash equivalents and $63.0 million in available, undrawn borrowing capacity under its asset-backed credit facility. Total inventories decreased by 14.5 percent compared to August 3, 2024. Total year-to-date capital expenditures at the end of the second quarter were $2.1 million this year, compared to $4.6 million at the end of the second quarter of fiscal 2024.

Fiscal 2025 Third Quarter Outlook
Total comparable net sales for fiscal August ended August 30, 2025, increased by 0.9 percent relative to the comparable period of last year. Based on current and historical trends, the company currently estimates the following for the third quarter of fiscal 2025 ending November 1, 2025:

  • Net sales in the range of approximately $134 million to $140 million, translating to an estimated comparable net sales range of a decrease of 2 percent to an increase of 2 percent, respectively, relative to the comparable period last year.
  • SG&A expenses to be approximately $47 million, excluding any potential non-cash asset impairment charges that may arise.
  • Net loss of approximately $10.5 million to $7 million, respectively, with a near-zero effective income tax rate due to the continuing impact of a full, non-cash valuation allowance on deferred tax assets.
  • Per share results to be in the range of a net loss of $0.35 to $0.23, respectively, compared to a net loss per share of $0.43 for last year’s third quarter..
  • Total quarter-ending store count of 230 compared to 246 at the end of last year’s third quarter, with four store closures and two new store openings during the quarter. At this time, the company expects to close two additional stores in the fourth quarter; however, more closures may occur at the end of the fiscal year, depending on the outcome of lease renewal negotiations with landlords.
  • Total quarter-ending liquidity of approximately $83 million to $86 million with no debt, comprised of total cash, cash equivalents and marketable securities in the range of approximately $20 million to $25 million, and available, undrawn borrowing capacity of approximately $61 million to $63 million under its asset-backed credit facility. The company does not anticipate needing to initiate borrowings under its credit facility during fiscal 2025.

Image courtesy Tilly’s, Inc.