Tilly’s, Inc., the Irvine-headquartered specialty retailer, on Wednesday, March 11, 2026, reported strong numbers for the financial year 2025 with the fourth quarter turning profitable for the first time since FY 2021. The 44-year-old apparel and accessories retailer also narrowed its annual losses while closing 17 stores.
Tilly’s Reports Profit in Fourth Quarter of Fiscal 2025
The fourth quarter ended January 31, 2026, marked a return to profitability for Tilly’s. The retailer not only posted a profit of $2.9 million, but it also managed to more than double the cash and cash equivalents. The company has returned to an earnings per share (EPS) of $0.10, compared with a loss of $0.45 per share a year earlier.
The net sales from physical stores rose 3.6% to $112.2 million, comparable net sales from stores grew 10.3%, while comparable e-commerce sales jumped 9.8%, collectively providing a gain of 10.1% in total comparable sales for the company.
- Net Revenue: $155.1 million, up 5.3%
- Gross Profit: $51.5 million, up 3.5%
- Net Profit: $2.9 million vs loss of $13.7 million
- Cash and Cash Equivalents: $46.3 million, up 120%
- Store Count: 223
Tilly’s surprisingly managed to achieve this feat with 17 fewer stores as it operated a total 240 stores at the end of fourth quarter of 2024.
The net sales from physical stores saw a margin dip (130 basis points), which was effectively counterbalanced by a largely equal rise in net sales from e-commerce platforms, 120 basis points.
Operating fewer stores also helped the company reduce costs, including distribution, occupancy, and selling, general, and administrative expenses (SG&A). “Product margins improved by 470 basis points primarily due to the combination of higher initial markups and lower markdowns as a result of operating with reduced, more current inventory,” Tilly’s said in a SEC filing.
Lower occupancy costs linked to reduced store count helped save $1.9 million in buying, distribution, and occupancy, whereas the retailer saved $3.5 million in SG&A, largely due to drop in store payroll and employee related benefits.
“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,” Tilly’s Inc. President and CEO Nate Smith commented.
Tilly’s Store Optimization
Tilly’s finished fiscal year 2025 with 223 stores. This has been the lowest store count since 2018. The company had a store count of 229 at the end of fourth quarter of 2018.
Tilly’s has been tactically reducing and optimizing the store count across 33 states in the United States to minimize the costs, while improving the efficiency.
Tilly’s Store Count (at the end of previous fiscals):
- FY 2019: 240
- FY 2020: 238
- FY 2021: 241
- FY 2022: 249
- FY 2023: 248
- FY 2024: 240
The company has been closing underperforming stores as part of an effort to streamline operations and improve profitability. The Californian company is now planning to do away with 3 more stores, taking the total store count to 220 by the end of first quarter of FY 2026 as against 238 stores in Q1 FY 2025.
“In terms of store real estate, with the improved store comp trends we’ve seen over the last 7 months and counting, and because our unit economics support it, we are now pivoting from a store closure posture to a disciplined approach to new store openings in fiscal 2026, with a plan to open 4-6 new stores,” Nate Smith said in the earnings call.
“We will remain selective and reasonably conservative in our future expectations for new stores, but it is encouraging to reach an inflection point of feeling the confidence to begin strategically considering store growth again. Fiscal 2025 was a year of significant store optimization, resulting in 21 total store closures,” Smith added.
Tilly’s Looks to Control Losses
Tilly’s expects losses to narrow in the upcoming quarter, but it expects a net loss in the range of $0.34 to $0.27 per share in Q1 FY 2026, as compared to a net loss of $0.74 a piece at the end of previous fiscal’s first quarter. The company has provided an outlook of net loss between the range of $10.1 million and $8 million.
These estimates are based on an expected comparable net sales growth of 16-22% and net sales coming in the range of $119 to $125 million.
Tilly’s Stock Doubles, Nearly
Shares of Tilly’s (NYSE: TLYS) rallied heavily in the pre-market trading on March 12, 2026, after the company reported the earnings. The stock went up like a bazooka, surging as much as 95% to $3.08, from the previous closing price of $1.58. The last one month has been positive for Tilly’s stock as it has rallied 18%, partly reversing the 32% loss that occurred till February 12, 2026.
Most analysts covering the stock had previously lowered their price targets. Tilly’s remains a smaller retailer that has struggled to maintain consistent revenue growth. Over the last few years, the brand has not been able to sustain a positive growth in quarterly revenues.
“Since turning positive in August, we have now produced seven consecutive months of comparable net sales growth, including February 2026 increasing by 20%. We are off to a strong start to fiscal 2026 and we feel optimistic about our prospects for the year,” President and CEO Smith indicated while delivering the results.
Earlier in 2021, Tilly’s reported a quarterly revenue exceeding $200 million for the first time with a net sales of $202 million for Q2 of the financial year 2021. This was followed by a net sales of $204.5 million in the fourth quarter of the same fiscal year, largely aided by holiday period surge.
In the last 12-month period, the stock has lost nearly half of its value, while the stock has eroded nearly 88% of the investors’ wealth in the last 5 years.
A quarter of positive growth can’t outrightly change investors’ perspective, or the analysts’ call to buy, hold, or sell. Tilly’s will have to continue with optimized costs, lower footprint and sustainable sales to make a mark.
