TLDR
- Q4 earnings per share reached $0.10, significantly exceeding Wall Street’s -$0.32 loss projection
- Quarterly sales totaled $155.1 million, marking a 5.3% increase from last year and surpassing analyst estimates of $146–$148 million
- Comp store sales increased 10.1%, marking the seventh consecutive month of positive comparable sales performance
- Gross profit margin improved dramatically to 33.2%, up from 26.0% in the prior-year quarter
- First quarter 2026 revenue forecast of $119M–$125M substantially exceeds the $106.5M consensus expectation
Shares of Tilly’s rocketed higher Thursday following the youth apparel retailer’s announcement of its first profitable holiday quarter in three years, easily surpassing analyst projections for both the top and bottom lines.
The specialty retailer delivered adjusted earnings of $0.10 per share for the fourth quarter concluded on January 31, 2026. This represented a stunning reversal from the consensus forecast calling for a -$0.32 per share deficit, and marked substantial progress versus the -$0.45 loss recorded in the same period last year.
Quarterly sales reached $155.1 million, representing a 5.3% uptick compared to the year-earlier period. Wall Street had anticipated figures in the $146–$148 million range.
Comparable store sales surged 10.1% during the quarter. Brick-and-mortar locations generated a 10.3% comparable sales increase, while digital channels contributed a 9.8% gain.
This performance extended the company’s positive comp sales streak to seven months. The momentum carried into February 2026, where comparable sales climbed an impressive 20%.
Nate Smith, the company’s CEO, highlighted the strengthening business trends. “Our positive comparable store net sales momentum accelerated in the fourth quarter of fiscal 2025 and produced our first profitable fourth quarter and full-year positive comp sales since fiscal 2021,” he stated.
Gross margin expanded to 33.2%, a significant improvement from 26.0% posted in the comparable quarter last year. The primary catalyst was a 470 basis point enhancement in product margins, attributable to improved initial markup rates and reduced promotional activity.
Operational efficiency also improved. The retailer maintained tighter control over inventory levels with fresher merchandise, while SG&A costs declined by $3.5 million to $48.9 million, largely reflecting reduced store labor expenses.
Forward Outlook Exceeds Expectations
The company’s first-quarter 2026 forecast provided additional momentum to the stock surge. Management projects sales between $119 million and $125 million, with a $122 million midpoint significantly outpacing the $106.5 million analyst consensus.
This guidance implies comparable sales growth of 16% to 22% for the period. Product margin expansion is anticipated in the 310 to 330 basis point range.
Selling, general and administrative expenses are forecast at $44 million to $45 million. The net loss is expected to fall between $8 million and $10.1 million, translating to -$0.27 to -$0.34 per share — representing meaningful improvement versus the -$0.74 per share loss in Q1 2025.
The retailer expects to operate 220 locations during the quarter, compared to 238 stores in the prior-year period. The company closed the fourth quarter with 223 stores, 17 fewer than a year earlier.
Massive Volume Surge Accompanies Rally
TLYS shares jumped more than 65% during premarket trading Thursday before finishing the regular session with gains between 48% and 56%. This followed a modest 3.16% increase in the previous session.
Trading activity exploded Thursday with over 14 million shares transacted. For context, the three-month average daily volume stood at merely 40,000 shares — representing a 350-fold surge.
Prior to Thursday’s breakout session, the stock had declined 18% year-to-date and approximately 38% over the trailing twelve months.
The company reported total available liquidity of $87.8 million at the end of the quarter.
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