Tilly’s, Inc. logged its first profitable fourth quarter since 2021 as same-store sales grew a better-than-expected 10.1 percent. The action-sports-themed chain forecasted that same-store sales will surge by 16 percent to 22 percent.

“Our positive comparable store net sales momentum accelerated in the fourth quarter of fiscal 2025 and produced our first profitable fourth quarter and full-year positive comp sales since fiscal 2021,” commented Nate Smith, president and chief executive officer. “Since turning positive in August, we have now produced seven consecutive months of comparable net sales growth, including February 2026 increasing by 20 percent. We are off to a strong start to fiscal 2026, and we feel optimistic about our prospects for the year.”

Sales in the quarter ended January 31 were $155.1 million compared to guidance in the range of $146 million to $151 million; same-store sales grew 10.3 percent against guidance in the range of 4 percent to 8 percent; and EPS was positive 10 cents a share against guidance calling for a loss in the range of 19 cents to 12 cents.

Operating Results Overview
Fiscal 2025 Fourth Quarter Compared to Fiscal 2024 Fourth Quarter

The following comparisons refer to the company’s operating results for the fourth quarter of fiscal 2025, ended January 31, 2026, versus the fourth quarter of fiscal 2024, ended February 1, 2025.

  • Total net sales were $155.1 million, up 5.3 percent. Total comparable net sales, including both physical stores and e-commerce (“e-com”), increased by 10.1 percent.
  • Net sales from physical stores were $112.2 million, up 3.6 percent. The company ended the fourth quarter with 223 total stores, a decrease of 17 stores or 7.1 percent, compared to 240 total stores at the end of the fourth quarter last year. Comparable net sales from physical stores increased by 10.3 percent relative to the comparable 13-week period ended February 1, 2025. Net sales from physical stores accounted for 72.3 percent of total net sales this year, compared with 73.5 percent last year.
  • Net sales from e-com were $43.0 million. Comparable net sales from e-com increased by 9.8 percent. E-com net sales represented 27.7 percent of total net sales this year compared to 26.5 percent of total net sales last year.
  • Gross profit, including buying, distribution, and occupancy costs, was $51.5 million, or 33.2 percent of net sales, compared to $38.3 million, or 26.0 percent of net sales, last year. Product margins improved by 470 basis points, primarily due to higher initial markups and lower markdowns resulting from operating with reduced, more current inventory. Buying, distribution, and occupancy costs improved by 250 basis points, or $1.9 million, collectively, primarily due to decreased occupancy costs associated with reduced store count.
  • Selling, general and administrative (SG&A) expenses were $48.9 million, or 31.5 percent of net sales, compared to $52.4 million, or 35.6 percent of net sales, last year. The $3.5 million decrease in SG&A was primarily attributable to a $1.6 million decrease in store payroll and related benefits, among several other smaller reductions in various expenses.
  • Operating income improved to $2.6 million, or 1.7 percent of net sales, compared to an operating loss of $14.1 million, or 9.6 percent of net sales, last year, due to the combined impact of the factors noted above.
  • Income tax expense was $18 thousand, or 0.6 percent of pre-tax income, compared to $0.2 million, or 1.8 percent of pre-tax loss, last year. Both periods include the continuing impact of a full, non-cash deferred tax asset valuation allowance.
  • Net income improved to $2.9 million, or 10 cents per diluted share, from a net loss of $13.7 million, or 45 cents net loss per share, last year, representing an improvement of $16.6 million, or 55 cents per share, compared to last year. Weighted average diluted shares were 30.3 million this year, compared to 30.1 million weighted average shares last year.

Fiscal 2025 Full Year Operating Results Overview
The following comparisons refer to the company’s operating results for fiscal 2025, ended January 31, 2026, versus fiscal 2024, ended February 1, 2025.

  • Total net sales were $553.6 million, down 2.8 percent. Total comparable net sales, including both physical stores and e-commerce (“e-com”), increased by 0.3 percent.
  • Net sales from physical stores were $431.1 million, down 3.1 percent. Comparable store net sales from physical stores increased by 0.9 percent relative to the comparable 52-week period ended February 1, 2025. Net sales from physical stores accounted for 77.9 percent of total net sales this year, compared with 78.1 percent last year.
  • Net sales from e-com were $122.5 million, a decrease of 1.8 percent. E-com net sales represented 22.1 percent of total net sales this year compared to 21.9 percent of total net sales last year.
  • Gross profit, including buying, distribution, and occupancy costs, was $164.5 million, or 29.7 percent of net sales, compared to $149.7 million, or 26.3 percent of net sales, last year. Product margins improved by 290 basis points, primarily due to higher initial markups and lower markdowns resulting from operating with reduced, more current inventory. Buying, distribution, and occupancy costs improved by 50 basis points, or $7.1 million, collectively, primarily due to decreased occupancy costs associated with operating 17 fewer net stores.
  • Selling, general and administrative (SG&A) expenses were $183.8 million, or 33.2 percent of net sales, compared to $199.5 million, or 35.0 percent of net sales, last year. The $15.7 million reduction in SG&A was primarily attributable to decreases in store payroll and related benefits of $6.0 million, non-cash asset write-down charges of $3.2 million, e-com fulfillment labor of $2.6 million, and several other smaller reductions in various expenses.
  • Operating loss improved to $19.3 million, or 3.5 percent of net sales, compared to $49.8 million, or 8.8 percent of net sales, last year, due to the combined impact of the factors noted above.
  • Income tax benefit was $137 thousand, or 0.8 percent of pre-tax loss, compared to income tax expense of $0.2 million, or 0.5 percent of pre-tax loss, last year. Both periods include the continuing impact of a full, non-cash deferred tax asset valuation allowance.
  • Net loss improved to $17.5 million, or 58 cents per share, compared to $46.2 million, or $1.54 net loss per share, last year, representing an improvement of $28.7 million, or 96 cents per share, compared to last year. Weighted average shares were 30.1 million this year compared to 30.0 million last year.

Balance Sheet and Liquidity
As of January 31, 2026, the company had total available liquidity of $87.8 million, comprised of $46.3 million of cash and cash equivalents and $41.5 million of available, undrawn borrowing capacity under its asset-backed credit facility. Total inventories decreased by 10.8 percent compared to the end of the fourth quarter last year. Total year-to-date capital expenditures at the end of the fourth quarter were $4.7 million this year, compared to $8.2 million at the end of the fourth quarter of fiscal 2024.

Fiscal 2026 First Quarter Outlook

  • Total comparable net sales for the first fiscal month of fiscal 2026, ended February 28, 2026, increased by 20.1 percent relative to the comparable period of fiscal 2025. Based on current and historical trends, the company currently estimates the following for the first quarter of fiscal 2026, ending May 2, 2026.
  • Net sales in the range of approximately $119 million to $125 million, translating to an estimated comparable net sales increase of 16 percent to 22 percent, respectively, relative to last year’s first quarter.
  • Product margin improvement of approximately 310 to 330 basis points relative to last year’s first quarter.
  • SG&A expenses to be approximately $44 million to $45 million, excluding any potential non-cash asset impairment charges that may arise;Net loss of approximately $10.1 million to $8.0 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 $0.34 to $0.27, respectively, compared to a net loss per share of $0.74 for last year’s first quarter, with estimated weighted average shares of approximately 30.1 million.
  • The company expects to have 220 stores open at the end of the first quarter of fiscal 2026, compared to 238 at the end of last year’s first quarter.

Promotion of Michael J. Cingolani to Chief Merchandising Officer
On March 10, 2026, the company promoted Michael J. Cingolani to chief merchandising officer in recognition of his contributions to the company’s business performance since his appointment as senior vice president, general merchandising manager in November 2024.

Image courtesy Tilly’s