Overview

• U.S. specialty apparel retailer's fiscal Q1 net sales rose 16%, with comp sales up 23%

• Net loss narrowed to $8.0 mln from $22.2 mln a year earlier

• Margin gains driven by improved full-price selling and lower occupancy costs

Outlook

• Tillys sees Q2 net sales of $154 mln to $160 mln

• Company expects Q2 comparable net sales to rise 6% to 10% year over year

• Tillys projects Q2 net income of $3.8 mln to $6.0 mln, EPS $0.13 to $0.20

Result Drivers

• COMPARABLE SALES GROWTH - Comp net sales rose 22.9% as both stores and e-commerce saw strong gains

• PRODUCT MARGIN IMPROVEMENT - Product margins rose 400 basis points, mainly due to improved full-price selling and more current inventories

• LOWER OCCUPANCY COSTS - Buying, distribution, and occupancy costs improved due to a reduced store count

Company press release: ID:nBw4mCRHXa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Sales		$124.72 mln	$121.30 mln (1 Analyst)
Q1 EPS		-$0.26
Q1 Net Income		-$7.95 mln
Q1 Gross Profit		$36.07 mln
Q1 Operating Income		-$8.10 mln
Q1 Pretax Profit		-$7.82 mln

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 is $3.00, about 32.9% below its June 2 closing price of $4.47

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