American retail clothing company Tilly’s, Inc has reported improved profitability for its fiscal third quarter (Q3) ended November 01, 2025. Total net sales declined 2.7 per cent year on year (YoY) to $139.6 million, but comparable net sales rose 2 per cent across stores and e-commerce.
Tilly’s has reported improved Q3 profitability despite a 2.7 per cent sales decline, with comps up 2 per cent and margins strengthening.
Net loss narrowed to $1.4 million.
Year-to-date sales fell 5.6 per cent, but losses reduced.
Liquidity reached $100.7 million.
Strong early Q4 trends support guidance, with expected comp growth of 4–8 per cent and further margin gains.
Store sales dipped 0.9 per cent to $110.3 million. The retailer operated 230 stores at quarter-end, down 16 from a year earlier, yet comparable store sales increased 5.3 per cent. Stores contributed 79 per cent of total revenue, up from 77.6 per cent last year. E-commerce revenue fell 9 per cent to $29.3 million, largely due to a 51 per cent reduction in clearance activity.
Gross profit rose sharply to $42.6 million, improving to 30.5 per cent of sales from 25.9 per cent last year, driven by a 390-basis-point lift in product margins and lower markdowns following tighter inventory management. Lower occupancy costs from a reduced store footprint also aided performance.
Selling, general and administrative (SG&A) costs fell to $44.5 million from $51.3 million, helped by reduced store payroll, fulfilment labour and lower non-cash asset write-downs. Operating loss narrowed significantly to $1.9 million from $14.1 million. Net loss improved to $1.4 million, or $0.05 per share, compared with a $12.9 million loss, or $0.43 per share, a year earlier.
For the first 39 weeks of fiscal 2025 (FY25), Tilly’s generated $398.5 million in sales, down 5.6 per cent, with comparable sales (comps) down 3 per cent. Year-to-date net loss improved to $20.4 million from $32.6 million last year, Tilly’s said in a media release.
The retailer ended the quarter with liquidity of $100.7 million, including $39 million in cash. Inventory levels were 12.8 per cent lower than last year, and capital expenditure totalled $3.4 million versus $6.7 million a year earlier.
“The third quarter of fiscal 2025 produced our first quarter with comparable net sales growth since the fourth quarter of fiscal 2021, and that positive momentum has continued into this year’s fourth quarter. Our third quarter results exceeded our expectations, which we believe demonstrates the effectiveness of our initiatives and our team’s ability to execute,” commented Nate Smith, president and chief executive officer.
Early fourth-quarter trading has been positive, with comparable sales up 6.7 per cent through December 02, 2025. Tilly’s expects Q4 net sales between $146 million and $151 million, reflecting comp growth of 4–8 per cent, and product margin gains of 300–350 basis points. It forecasts a net loss of $3.5 million to $5.6 million, or $0.12–$0.19 per share, an improvement from last year’s $0.45 loss per share.
The company anticipates closing seven stores this quarter, ending fiscal 2025 with 223 locations, 7.1 per cent fewer than a year earlier, with potential for more closures pending lease negotiations.
“Great effort has gone into getting our business to this point, but we also recognise the work that remains to return the company to profitable growth. I am excited to be here with this team as we strive to continue building forward momentum in the fourth quarter and into fiscal 2026,” Smith said.
Fibre2Fashion News Desk (HU)
