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- **Positive Momentum**: Q3 2025 marks first positive comp since 2021, with 2% growth driven by improved assortment and marketing.
- **Private Brand Expansion**: Targeting 40% penetration, up from 37%, with proprietary brands outperforming.
- **Gross Margin Recovery**: 30.5% gross margin (+460bps YoY), supported by AI-driven price optimization.
- **Q4 Outlook**: $146-151M sales (+4-8% comp), 300-350bps margin improvement, and 7 store closures.
- **Strategic Investments**: Social commerce growth, consumer segmentation, and AI tools positioning Tilly's for long-term profitability.

**【CEO Summary Section】**
- Tilly's achieved its first positive quarterly comparable net sales result since Q4 2021, with 2% comp growth driven by improved merchandise assortment, marketing, and expense management.
- Proprietary brand penetration is targeted to reach 40% annually, up from 37% year-to-date, with strong sell-through of brands like RSQ.
- Social commerce sales via TikTok have surged, with a 51% reduction in clearance e-commerce sales reflecting higher full-price quality.
- Consumer segmentation identified 6 primary profiles, guiding tailored assortment and marketing strategies.
- AI-driven tools (price optimization, RFID) are improving margins and efficiency, with plans to launch replenishment tools in H2 2026.
- Brand ambassador campaigns with Loren Gray and Malibu Skyye are enhancing brand awareness and customer engagement.

**【CFO Financial Commentary】**
- Q3 2025: Total net sales $139.6M (-2.7% YoY), with 5.3% physical store comp growth offsetting 9% e-commerce decline.
- Gross margin improved 460bps to 30.5%, driven by higher initial markups and lower markdowns.
- SG&A expenses reduced 3.8% YoY to $44.5M, with store payroll and e-commerce labor savings.
- Q4 2025 Outlook: Sales $146-151M (+4-8% comp), product margin improvement 300-350bps, pretax loss $3.5-5.6M.
- 7 store closures planned, reducing total count to 223 (7.1% YoY decline).
- Liquidity remains strong at $100.7M, supporting ongoing initiatives.

**【Q&A Highlights】**
- **Comp Growth Drivers**: 50-50 split between better assortment (third-party and proprietary brands) and marketing (social media, brand partnerships).
- **Private Brands Strategy**: 37% current penetration, targeting 40%, with higher margins and customer preference for exclusive products.
- **E-commerce Shift**: Reduced clearance sales reflect healthier inventory management, with full-price e-commerce growth.
- **SG&A Sustainability**: Store payroll efficiency (7% fewer hours YoY) and wage control support margin expansion.
- **RFID Implementation**: Minimal incremental costs, focusing on inventory accuracy and customer experience.

Tilly's, Inc. (TLYS) Q3 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

TLYS

TLYS fundamentals

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