Tilly’s (TLYS) investor relations material

Executive summary

• Achieved first profitable quarter since 2022, with net income of $3.2 million ($0.10 per share), reversing a net loss last year.

• Net sales for Q2 were $151.3 million, down 7.1% year-over-year, with comparable net sales down 4.5%.

• Gross margin improved to 32.5% from 30.7% last year, driven by higher markups and lower markdowns.

• Operating income was $2.7 million, compared to an operating loss of $0.9 million last year.

• New CEO Nate Smith joined, focusing on operational improvements and leadership transition.

Financial highlights

• SG&A expenses decreased by $4.4 million to $46.4 million (30.7% of net sales), with payroll and fulfillment labor as key drivers.

• Ended Q2 with $113.7 million in liquidity, including $50.7 million in cash, and no debt.

• First half net sales were $258.9 million, down 7.1% year-over-year, with a net loss of $19.0 million.

• Working capital at quarter-end was $17.9 million, down from $31.6 million at the start of the year.

• Average net sales per store were $520,000 for the quarter.

Outlook and guidance

• Q3 net sales expected between $134 million and $140 million; comparable sales guidance of -2% to +2%.

• Projected Q3 net loss of $6.9 million–$10.5 million, or $0.23–$0.35 per share, an improvement over last year.

• Store count projected at 230 by Q3 end, with further closures possible in Q4.

• Expect to remain debt-free with $83–86 million in liquidity at Q3 end.

• Effective income tax rate expected to remain near zero due to a full valuation allowance.