Tilly’s Inc. reported fiscal second-quarter 2026 earnings that exceeded Wall Street estimates, sending shares up 32% in extended trading on Wednesday.
The Costa Mesa, California-based retailer posted net income of $8.4 million, or $0.27 per diluted share, compared with $3.2 million, or $0.10 per share, in the same period a year earlier. Analysts had expected earnings of $0.17 per share. Revenue rose 8.1% year-over-year to $163.5 million, topping the $151.3 million consensus estimate.
Comparable store sales increased 12.1%, marking the third consecutive quarter of double-digit growth. Physical store sales rose 5.1% despite operating 12 fewer locations, while e-commerce sales climbed 20.9%, representing 21.1% of total revenue. Gross margin expanded by 300 basis points to 35.5% of net sales, driven by higher product margins and lower buying and distribution costs.
Cash and investments totaled $62.2 million at quarter-end, up from $50.7 million a year ago, with $63.3 million of undrawn borrowing capacity under its asset-backed credit facility. Inventory levels declined 1.3% year-over-year.
During regular trading, shares of Tilly’s closed at $3.81, down 3.8%. In after-hours activity, the stock jumped to $5.02, a gain of 31.8%.
Management provided guidance for the fiscal third quarter, estimating net sales of $150 million to $155 million and comparable sales growth of 10% to 14%. Net income is projected at $2.2 million to $3.7 million, equating to earnings per share of $0.07 to $0.12. SG&A expenses are expected to range from $47 million to $49 million, excluding non-cash asset impairment charges.
Tilly’s plans to open one store and close three during the quarter, ending with 240 locations. The company expects total liquidity of at least $125 million, including $62 million to $65 million in cash and equivalents and $63.3 million in available credit capacity.
CEO Nate Smith highlighted the company’s disciplined execution, noting the three consecutive quarters of double-digit comp sales growth and a return to profitability on a trailing four-quarter basis. CFO Michael Henry emphasized the 300-basis-point improvement in gross margin to 35.5% of sales.
The retailer also reported growth in its loyalty program membership, which rose 20% year-over-year to 4.6 million active members, and a near doubling of TikTok followers to over 325,000. Technology initiatives include an AI price optimization tool launched in October 2025 and plans for an AI-driven inventory allocation system and RFID implementation in early 2027.
