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Tilly's, Inc. Reports Fiscal 2025 Second Quarter Operating Results

Introduces Third Quarter Outlook with Continued Improvement in Sequential Sales Trend

IRVINE, Calif.--(BUSINESS WIRE)-- Tilly鈥檚, Inc. (NYSE: TLYS, the "Company") today announced financial results for the second quarter of fiscal 2025 ended August 2, 2025.

"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."

Operating Results Overview

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, a decrease of 7.1%. Total comparable net sales, including both physical stores and e-commerce ("e-com"), decreased by 4.5%.
  • Net sales from physical stores were $122.7 million, a decrease of 7.3%. The Company ended the second quarter with 232 total stores, a decrease of 15 stores or 6.1%, compared to 247 total stores at the end of the second quarter last year. Comparable store net sales decreased 4.1% relative to the comparable 13-week period ended August 3, 2024. Net sales from physical stores represented 81.1% of total net sales this year compared to 81.3% of total net sales last year.
  • Net sales from e-com were $28.5 million, a decrease of 6.6%. E-com net sales decreased 6.2% relative to the comparable 13-week period ended August 3, 2024. E-com net sales represented 18.9% of total net sales this year compared to 18.7% of total net sales last year.
• Gross profit, including buying, distribution, and occupancy costs, was $49.1 million, or 32.5% of net sales, compared to $49.9 million, or 30.7% of net sales, last year. Product margins improved by 210 basis points primarily due to the combination of higher initial markups and lower markdowns as a result of 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 carrying these costs 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 due primarily to reduced temporary labor expenses.
• Selling, general and administrative ("SG&A") expenses were $46.4 million, or 30.7% of net sales, compared to $50.8 million, or 31.2% 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% of net sales, compared to operating loss of $0.9 million, or 0.5% of net sales, last year, due to the combined impact of the factors noted above.
• Income tax benefit was $41 thousand, or (1.3)% of pre-tax income, compared to income tax benefit of $4 thousand, or 6.2% 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 $0.10 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%. Total comparable net sales, including both physical stores and e-commerce ("e-com"), decreased by 5.5%.
  • Net sales from physical stores were $208.6 million, a decrease of 7.3%. Comparable store net sales decreased 5.3% relative to the comparable 26-week period ended August 3, 2024. Net sales from physical stores represented 80.6% of total net sales this year compared to 80.8% of total net sales last year.
  • Net sales from e-com were $50.2 million, a decrease of 6.3%. E-com net sales decreased 6.4% relative to the comparable 26-week period ended August 3, 2024. E-com net sales represented 19.4% of total net sales this year compared to 19.2% of total net sales last year.
• Gross profit, including buying, distribution, and occupancy costs, was $70.4 million, or 27.2% of net sales, compared to $74.2 million, or 26.6% of net sales, last year. Product margins improved by 140 basis points primarily due to higher initial markups and lower markdowns as a result of 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% of net sales, compared to $95.9 million, or 34.4% 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%% of net sales, compared to $21.6 million, or 7.8% 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% of pre-tax loss, compared to $17 thousand, or 0.1% 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 $0.63 per share, compared to $19.7 million, or $0.66 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, comprised of $50.7 million of cash and cash equivalents and $63.0 million of available, undrawn borrowing capacity under its asset-backed credit facility. Total inventories decreased by 14.5% 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% 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% to an increase of 2%, 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; and
• 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, although more are possible at the end of the fiscal year depending upon 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 at any time during fiscal 2025.

Conference Call Information

A conference call with analysts to discuss these financial results is scheduled for today, September 3, 2025, at 4:30 p.m. ET (1:30 p.m. PT). Analysts interested in participating in the call are invited to dial (877) 300-8521 (domestic) or (412) 317-6026 (international). The conference call will also be available to interested parties through a live webcast at . Please visit the website and select the 鈥淚nvestor Relations鈥� link at least 15 minutes prior to the start of the call to register and download any necessary software. A telephone replay of the call will be available until September 10, 2025, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 10201716.

About Tillys

Tillys is a destination specialty retailer of casual apparel, footwear, and accessories for young men, young women, boys and girls with an extensive selection of iconic global, emerging, and proprietary brands rooted in an active, outdoor and social lifestyle. Tillys is headquartered in Irvine, California and currently operates 231 total stores across 33 states, as well as its website, .

Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements regarding our current operating expectations in light of historical results, the improvement in our comparable net sales trend and our ability to maintain or improve upon it, the impacts of inflation, tariffs, and potential recession on us and our customers, including on our future financial condition or operating results, expectations regarding changes in the macro-economic environment, customer traffic, our supply chain, our ability to properly manage our inventory levels, and any other statements about our future cash position, financial flexibility, expectations, plans, intentions, beliefs or prospects expressed by management are forward-looking statements. These forward-looking statements are based on management鈥檚 current expectations and beliefs, but they involve a number of risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to the impact of inflation on consumer behavior and our business and operations, supply chain difficulties, and our ability to respond thereto, our ability to respond to changing customer preferences and trends, attract customer traffic at our stores and online, execute our growth and long-term strategies, expand into new markets, grow our e-commerce business, effectively manage our inventory and costs, effectively compete with other retailers, attract talented employees, or enhance awareness of our brand and brand image, general consumer spending patterns and levels, including changes in historical spending patterns, the markets generally, our ability to satisfy our financial obligations, including under our credit facility and our leases, and other factors that are detailed in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (鈥淪EC鈥�), including those detailed in the section titled 鈥淩isk Factors鈥� and in our other filings with the SEC, which are available on the SEC鈥檚 website at and on our website at under the heading 鈥淚nvestor Relations鈥�. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. This release should be read in conjunction with our financial statements and notes thereto contained in our Form 10-K.

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Investor Relations Contact:

Michael Henry, Executive Vice President, Chief Financial Officer

(949) 609-5599, ext. 17000

[email protected]

Source: Tilly鈥檚, Inc.