What Happened?
Shares of young adult apparel retailer Tilly’s (NYSE: TLYS) jumped 10.9% in the afternoon session after the company reported impressive first quarter 2025 results and provided optimistic revenue and EPS guidance for the next quarter, which blew past analysts' expectations. Sales weakness improved as the company observed consistent traffic gains. The company was also betting on the seasonally strong Back-to-School Season to drive volume growth, further reinforcing the upbeat guidance despite ongoing store closures.
On the other hand, the quarter's revenue, EPS, and EBITDA fell short of Wall Street's estimates. Zooming out, we think this was a mixed yet decent quarter.
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What The Market Is Telling Us
Tilly’s shares are extremely volatile and have had 68 moves greater than 5% over the last year. But moves this big are rare even for Tilly's and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 10.6% on the news that the company reported first quarter earnings. EPS fell below analyst's expectations. While revenue came in narrowly ahead of Wall Street's estimates, top line growth continued to decline in absolute terms.
Guidance was also weak as the earnings forecast for the next quarter missed analysts' expectations, disappointing investors. Management struck a not-so-confident tone, adding that it might be "difficult to improve our sales results in the near term." This is partly a result of the macroeconomic challenges experienced during the quarter. Overall, the results could have been better.
Tilly's is down 67.2% since the beginning of the year, and at $1.49 per share, it is trading 76.2% below its 52-week high of $6.28 from July 2024. Investors who bought $1,000 worth of Tilly’s shares 5 years ago would now be looking at an investment worth $233.52.
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