Tillys, Inc. reported its fiscal 2025 third‑quarter results on December 3, 2025, showing total net sales of $139.6 million—a 2.7% year‑over‑year decline from $143.4 million in Q3 2024. Despite the top‑line dip, comparable net sales rose 2% to $139.6 million, marking the first period of positive comparable growth since the fourth quarter of fiscal 2021. The rebound is largely driven by a 5.3% increase in in‑store comparable sales, while e‑commerce net sales fell 9.0% as the company strategically reduced clearance activity to improve inventory turns.
Earnings per share reflected a sharp turnaround: Tillys posted a net loss of $0.05 per share, beating analyst expectations of a $0.30 loss by 83%. The beat stems from disciplined cost control, a 12.8% year‑over‑year inventory reduction, and a 390‑basis‑point lift in product margin that pushed gross margin to 30.5% from 25.9% a year earlier. Revenue, however, missed consensus estimates of $136.9 million by $2.7 million, a 1.9% shortfall, largely due to the e‑commerce decline and the company’s focus on higher‑margin proprietary brands.
Liquidity remains robust, with $100.7 million in available liquidity as of November 1, 2025—$39.0 million in cash and cash equivalents and $61.6 million in undrawn borrowing capacity under its asset‑backed credit facility. This financial cushion supports continued investment in merchandising, digital initiatives, and store‑fleet optimization.
For the fourth quarter, management guided net sales of $146 million to $151 million, with comparable net sales expected to grow 4% to 8%. Product margin improvement of 300–350 basis points and a pre‑tax loss of $3.5 million to $5.6 million (or a loss per share of $0.12 to $0.19) signal confidence in sustaining momentum while maintaining cost discipline.
CEO Nate Smith highlighted the return to comparable sales growth as evidence of the effectiveness of the company’s proprietary‑brand strategy and its focus on social commerce and AI‑driven pricing tools. CFO Michael Henry noted that the margin gains were driven by higher initial markups and reduced markdowns, underscoring the company’s ability to convert inventory efficiency into profitability.
Market reaction was strongly positive, with the stock surging between 13.9% and 26% in aftermarket trading. Analysts cited the EPS beat, the first comparable sales growth in four years, and the optimistic Q4 guidance as key drivers of the rally, while acknowledging ongoing headwinds such as the e‑commerce decline and the need to continue trimming store count. The overall sentiment reflects confidence in Tillys’ turnaround trajectory and its strategic focus on high‑margin growth areas.
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