Tilly’s (TLYS) investor relations material

Executive summary

• Achieved first profitable Q4 since 2021, surpassing expectations for both top and bottom line, with seven consecutive months and 18 weeks of positive comp sales momentum through February 2026.

• Q4 2025 net sales rose 5.3% to $155.1M, with comparable net sales up 10.1%.

• Improved merchandise assortments, digital marketing, and closed underperforming stores, driving operational gains.

• Store optimization led to 21 closures in 2025, but sales growth was delivered with 17 fewer net stores.

• Infrastructure investments and new tech tools contributed to margin and efficiency improvements.

Financial highlights

• Q4 2025 gross margin improved to 33.2% of net sales, up from 26.0% last year, driven by higher markups and lower markdowns.

• Product margins rose 470 bps due to higher markups and lower markdowns.

• SG&A expenses fell to $48.9M (31.5% of net sales), down $3.5M and 410 bps from last year.

• Operating income reached $2.6M (1.7% of net sales) vs. a $14.1M loss last year.

• Net income was $2.9M ($0.10 per diluted share), a $16.6M improvement year-over-year.

• Ended year with $87.8M liquidity, $46.3M cash, no debt, and $41.5M available credit.

Outlook and guidance

• Q1 2026 comparable net sales up 20.1% in February; expected Q1 net sales $119M-$125M, comp sales up 16%-22%.

• Product margin improvement of 310-330 bps expected in Q1 2026.

• Q1 2026 pre-tax and net loss projected at $10.1M-$8M, loss per share $0.34-$0.27, improved from $0.74 loss last year.

• 220 stores expected at Q1 end, down 18 stores year-over-year.

• Profitability for FY26 requires 8%-9% annualized comp sales growth.