Overview

* Tillys ( TLYS ) fiscal Q2 net sales fall 7.1%, missing analysts' expectations

* Gross profit margin improves to 32.5% from 30.7% due to better product margins

* Reports net income of $3.2 mln from a net loss last year

Outlook

* Tillys ( TLYS ) sees Q3 net sales of $134 mln to $140 mln

* Company expects Q3 comparable net sales to change by -2% to +2%

* Tillys ( TLYS ) projects Q3 net loss of $10.5 mln to $7 mln

* Company anticipates Q3 SG&A expenses around $47 mln

Result Drivers

* PRODUCT MARGINS - Improved product margins driven by higher initial markups and lower markdowns due to reduced, more current inventory

* SG&A COST REDUCTION - Decrease in SG&A expenses primarily due to reduced store payroll and related benefits

* STORE CLOSURES - Operating fewer stores contributed to lower occupancy costs and overall cost reductions

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Sales Miss $151.26 $154 mln

mln (1

Analyst)

Q2 Net $3.16

Income mln

Q2 Gross $49.10

Profit mln

Q2 $2.68

Operatin mln

g Income

Q2 $3.12

Pretax mln

Profit

Analyst Coverage

* The one available analyst rating on the shares is "hold"

* The average consensus recommendation for the apparel & accessories retailers peer group is "buy."

* Wall Street's median 12-month price target for Tillys Inc ( TLYS ) is $1.30, about 37.7% below its September 2 closing price of $1.79

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)