Tilly’s (TLYS) Q1 2025 earnings summary

Executive summary

• Q1 2024 net sales declined 6.3% year-over-year to $115.9 million, with comparable net sales down 9.4% due to inflation, macro headwinds, and shifting consumer preferences.

• Net loss widened to $19.6 million ($0.65 per share), compared to $12.0 million ($0.40 per share) last year; non-GAAP net loss was $14.5 million ($0.48 per share).

• Product margins improved by 130 basis points year-over-year due to lower markdowns and better initial markups.

• SG&A expenses rose to $45.1 million (38.9% of net sales), mainly from higher non-cash impairment charges and increased payroll.

• Operational and marketing initiatives are underway, with new systems and campaigns expected to drive long-term efficiencies and customer engagement.

Financial highlights

• Physical store net sales were $92.8 million (80.1% of total), down 5.1%; e-commerce sales were $23.0 million (19.9%), down 10.8%.

• Gross margin held steady at 21.0% of net sales; product margin improved by 130 basis points.

• SG&A expenses increased by $1.9 million to $45.1 million, with deleverage of 400 basis points.

• Pre-tax loss was $19.6 million (16.9% of net sales); operating loss margin was 17.9%.

• Cash, cash equivalents, and marketable securities totaled $68.0 million at quarter-end, with no debt outstanding.

Outlook and guidance

• Q2 2024 net sales expected at $160–$165 million, with comparable net sales down 7–10% year-over-year.

• SG&A projected at $48–$49 million; effective tax rate near zero due to deferred tax asset valuation allowance.

• Q2 net loss forecasted at $3.9–$0.9 million ($0.13–$0.03 per share); store count expected to be 247 at quarter end.

• 53rd week in fiscal 2023 will shift $15 million in back-to-school sales into Q2, impacting Q3 comparisons.

• Full-year capital expenditures not to exceed $15 million; four new stores planned for fiscal 2024.