Tilly's Reports Improved Net Loss of $1.4 Million in Q3 2025

Tilly's, Inc. reported its financial results for the third quarter and the first nine months of fiscal 2025, revealing a net loss of $1.4 million, or $0.05 per share, for the thirteen weeks ended November 1, 2025. This marks a significant improvement compared to a net loss of $12.9 million, or $0.43 per share, for the same period last year. Total net sales for the quarter were $139.6 million, a decrease of 2.7% from $143.4 million in the prior year. However, comparable store net sales increased by 2.0%, indicating a positive trend in customer engagement despite the overall decline in sales.

In the first nine months of fiscal 2025, Tilly's reported a net loss of $20.4 million, or $0.68 per share, compared to a net loss of $32.6 million, or $1.08 per share, in the same period last year. Total net sales for the nine-month period were $398.5 million, down 5.6% from $422.2 million in the previous year. The decline in sales was attributed to a decrease in both physical store and e-commerce sales, with physical store sales accounting for 80% of total net sales. The company operated 230 stores as of November 1, 2025, down from 246 stores a year earlier, reflecting ongoing efforts to optimize its retail footprint.

Tilly's strategic focus on improving gross profit margins was evident, as gross profit for the third quarter increased to $42.6 million, or 30.5% of net sales, compared to $37.2 million, or 25.9% of net sales, in the prior year. This improvement was driven by higher initial markups and lower markdowns due to more efficient inventory management. Selling, general, and administrative (SG&A) expenses also decreased to $44.5 million, or 31.9% of net sales, from $51.3 million, or 35.7% of net sales, a year ago, reflecting cost control measures and a reduction in store payroll and related benefits.

Operationally, Tilly's has seen a shift in its sales mix, with e-commerce sales representing 21.0% of total net sales, down from 22.4% in the previous year. The company has also been actively managing its inventory levels, resulting in a decrease in merchandise inventories to $80.7 million as of November 1, 2025, compared to $92.5 million a year earlier. The company anticipates closing a total of 21 stores during fiscal 2025, with 14 already closed, as part of its strategy to enhance profitability and streamline operations.

Looking ahead, Tilly's management expressed caution regarding the potential impacts of inflation and economic conditions on consumer spending. The company remains focused on improving its operational efficiency and adapting to changing market dynamics. Tilly's expects to continue leveraging its asset-backed credit facility, which provides up to $65 million in borrowing capacity, to support its liquidity needs and operational strategies. The company is committed to navigating the current retail landscape while aiming for a return to profitability in the future.