Tilly’s (TLYS) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2025 were $107.6 million, down 7.1% year-over-year, with comparable net sales also down 7.0%, but sequential improvement from Q4's 11.2% decline.

• Net loss widened to $22.2 million, or $0.74 per share, compared to $19.6 million, or $0.65 per share, last year.

• Gross margin decreased to 19.8% from 21.0% year-over-year, primarily due to deleverage on lower sales, though product margins improved by 40 basis points.

• E-commerce represented 20.2% of net sales, with physical store net sales down 7.4% and e-commerce net sales down 5.8%.

• Merchandise assortment, marketing initiatives, and a TikTok shop contributed to improved sales trends and customer engagement.

Financial highlights

• SG&A expenses were $44 million, or 40.9% of net sales, including $1.2 million in non-cash asset impairment/write-offs; SG&A deleveraged by 190 basis points.

• Operating loss increased to $22.7 million (21.1% of net sales) from $20.8 million (17.9%).

• Cash, equivalents, and marketable securities totaled $37.2 million at quarter end; working capital decreased to $10.5 million.

• Merchandise inventories were $75.6 million, down 3.8% in value and 10.9% in units year-over-year.

• No outstanding borrowings under the $65 million credit facility; $55.4 million available to borrow.

Outlook and guidance

• Q2 net sales expected between $150 million and $158 million, with comparable net sales ranging from -5% to flat.

• SG&A projected at $48–$49 million; net results expected to range from a $2.7 million loss to $2 million income, or ($0.09) to $0.07 per share.

• Store count to end Q2 at 232, with further closures possible depending on lease negotiations.

• Liquidity projected at $106–$111 million at Q2 end; company expects to remain debt-free throughout fiscal 2025 barring a 10%+ comp sales decline.

• Management does not anticipate needing to borrow unless comparable net sales decrease by 10% or more for the remainder of the year.