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NEW YORK - Tilly’s, Inc. (NYSE:TLYS) shares surged 26% after the specialty retailer reported a significantly narrower third-quarter loss than analysts expected, despite a slight revenue miss.
The casual apparel retailer posted a third-quarter loss of $0.05 per share, substantially better than the analyst estimate of a $0.37 loss. Revenue came in at $139.6 million, slightly below the consensus estimate of $141.1 million but showing encouraging signs of recovery with comparable sales increasing 2.0% YoY - the company’s first positive comparable sales quarter since late 2021.
The stock’s dramatic jump reflects investor relief as the company demonstrated meaningful progress in its turnaround efforts. Gross profit margin improved significantly to 30.5% from 25.9% last year, driven by 390 basis points of product margin improvement from higher initial markups and lower markdowns.
"The third quarter of fiscal 2025 produced our first quarter with comparable net sales growth since the fourth quarter of fiscal 2021, and that positive momentum has continued into this year’s fourth quarter," said Nate Smith, President and Chief Executive Officer. "Our third quarter results exceeded our expectations, which we believe demonstrates the effectiveness of our initiatives and our team’s ability to execute."
For the fourth quarter, Tilly’s provided an optimistic outlook, forecasting net sales between $146 million and $151 million, representing comparable sales growth of 4% to 8%. The company expects product margins to improve by 300 to 350 basis points compared to last year’s fourth quarter.
The retailer continues to optimize its store fleet, planning to end fiscal 2025 with 223 stores, down 7.1% from 240 stores at the end of fiscal 2024.
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