Tilly's, Inc.

Q1 fiscal 2026 total net sales were $125 million, up $17.1 million or 15.9% year over year. Comparable net sales increased 22.9%. Gross margin, including buying, distribution and occupancy expenses, improved to 28.9% from 19.8% last year, a 910 basis point increase. Total SG&A was $44.2 million, or 35.4% of sales. Pretax loss was $7.8 million versus $22.3 million a year ago, and net loss was $8 million, or $0.26 per share, versus $22.2 million, or $0.74 per share last year. For May, comparable sales increased 8.3%. For Q2, management guided to net sales of about $154 million to $160 million, comparable sales up 6% to 10%, product margins flat to slightly up, SG&A of about $48 million to $49 million, and net income of about $3.8 million to $6 million, or $0.13 to $0.20 per diluted share.

Nathan Smith framed the quarter as continued proof that the turnaround is gaining traction, citing the third straight quarter of comparable sales growth and the ninth straight month of growth. He emphasized stronger merchandising, improved customer engagement, and marketing efforts like TikTok as drivers of both traffic and loyalty growth. His tone was optimistic but measured: he said the company is not done, external headwinds remain, and the goal is to get sales productivity back above historical levels.

Mike Henry highlighted the hard numbers behind the improvement: sales of $125 million, gross margin of 28.9%, SG&A of $44.2 million, and a net loss of $8 million, or $0.26 per share. He noted the company ended the quarter with $41.1 million of cash and investments, no borrowings, and $50.7 million of undrawn capacity. For Q2, he guided to $154 million to $160 million in sales, near-zero tax rate, and $3.8 million to $6 million of net income, while also projecting total liquidity above $120 million and 221 stores at quarter-end.

Analysts focused on the durability of comp growth, whether inventory discipline might loosen as the company chases demand, and whether the strong e-commerce/TikTok trends are structural. Management said some key items have sold through faster than planned, but inventory is still in good shape and they are chasing winners to support momentum. They also said TikTok is bringing in both new and existing customers and reducing dependence on paid acquisition. On operations, management said there is plenty of DC and fulfillment capacity and no major CapEx or additional distribution node is expected.