Tilly’s Inc. — the Irving, Calif.-based specialty retailer — has generally operated, if not in the shadows of retail, then at its margins.
Most of its 223 teen-focused stores are tucked away in malls and the company has not generally distinguished itself with investors.
For a brief moment in 2018, Tilly’s market capitalization shot up to over $600 million, but expectations have been low and its market cap has lately been trading under $50 million — a valuation just slightly above the company’s cash on hand.
Until Thursday, when the combination of big fourth-quarter gains, a strong outlook, some short investors betting the stock would fall and the company’s relatively small footprint on Wall Street conspired for a blockbuster day.
You May Also Like
Shares of Tilly’s shot up as much 67 percent before closing up 50 percent to $2.45 for the day. That left the company with a market cap of $75.6 million.
Over 44 million shares traded hands, up from the average trading volume of just over 260,000.
While the run-up looked funky, like something driven by meme traders, it appears to have been at least partially investor feeding frenzy on the good vibes the retailer’s been projecting out of Southern California.
Tilly’s struggled in the post-pandemic period, posting significant declines in comparable sales, starting in 2022 and until the business started rebounding in August, when comp sales rose 1 percent.
That kicked off what’s been a seven-month streak culminating in a 20.1 percent comp increase last month.
For the fourth quarter ended Jan. 31, sales rose 5.3 percent to $155.1 million, with a 10.1 percent comp increase. Inventories, meanwhile, went the other way, falling 10.8 percent from a year earlier.
Profits totaled $2.9 million, up from losses of $13.7 million a year earlier.
Nate Smith, who’s been president and chief executive officer of Tilly’s since August, laid out a pretty straightforward playbook for analysts on a conference call, with underperforming stores being closed and the brand mix being reinvigorated.
“With each passing quarter, our comparable net sales results and product margins improved as these changes were being made, ultimately leading to comp sales growth throughout the second half of fiscal 2025, which is momentum we are carrying into early fiscal 2026,” Smith said. “Our merchandising teams put in a lot of effort to make the necessary changes to drive these improved results. I’d especially like to acknowledge Michael Cingolani, who we just promoted to chief merchandising officer for his leadership and tireless efforts in turning our sales trajectory around over the past year.
“Good product offerings need to be supported by effective marketing strategies and tactics to help new customers realize who we are and what we have to offer, to update existing customers on changes we have made and to reintroduce Tilly’s to former customers who may have disengaged from our brand,” the CEO said.
Put that way, it sounds easy — the hard work is getting it done.
Lately, Tilly’s has been getting it done.
