Tilly’s (TLYS) Q3 2026 earnings summary

Executive summary

• Achieved first positive quarterly comparable net sales since Q4 2021, with positive comps in every month and week of Q3 2025, and momentum continuing into Q4.

• Operated 230 stores in 33 states as of November 1, 2025, down from 246 a year ago, with e-commerce representing 21% of Q3 net sales.

• Persistent inflation, higher labor costs, and economic uncertainty continue to impact consumer spending and operating results.

• Strategic focus on merchandise assortment, inventory planning, marketing, and expense management credited for recent improvements.

• Expect to close 21 stores in fiscal 2025, with 14 already closed and 7 more planned for Q4.

Financial highlights

• Q3 2025 net sales were $139.6M, down 2.7% year-over-year; comparable net sales rose 2.0%, with physical stores up 5.3% and e-commerce down 9%.

• Gross margin improved to 30.5% of net sales (up from 25.9%), driven by higher initial markups and lower markdowns.

• SG&A expenses reduced to $44.5M (31.9% of net sales), down from $51.3M (35.7%) last year.

• Pre-tax loss improved to $1.4M (1% of net sales) from $12.9M (9% of net sales) last year; operating loss narrowed to $1.9M from $14.1M.

• Net loss improved to $1.4M ($0.05/share) from $12.9M ($0.43/share) last year.

• Ended Q3 with $100.7M in liquidity, including $39M in cash and $61.6M in unused borrowing capacity.

• Net inventories decreased by 12.8% year-over-year; year-to-date capital expenditures were $3.4M, down from $6.7M last year.

Outlook and guidance

• Q4 2025 comparable net sales expected to increase 4%-8% year-over-year, with total net sales projected at $146M–$151M.

• Anticipates product margin improvement of 300–350 bps versus last year; SG&A expected at $50M–$51M.

• Pre-tax and net loss forecasted at $5.6M–$3.5M, with loss per share of $0.19–$0.12, compared to $0.45 last year.

• Fiscal year-end store count expected at 223, down from 240 last year, with 7 more closures planned in Q4.

• Effective income tax rate expected near zero due to full valuation allowance on deferred tax assets.