Young adult apparel retailer Tilly’s (NYSE:TLYS) will be reporting earnings this Wednesday afternoon. Here’s what to look for.
Tilly's beat analysts’ revenue expectations last quarter, reporting revenues of $124.7 million, up 15.9% year on year. It was a stunning quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ gross margin estimates.
Is Tilly's a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Tilly’s revenue to grow 3.8% year on year, a reversal from the 7.1% decrease it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Tilly's has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Tilly’s peers in the apparel retailer segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Abercrombie and Fitch delivered year-on-year revenue growth of 4.8%, beating analysts’ expectations by 1.8%, and Gap reported a revenue decline of 2%, falling short of estimates by 0.9%. Abercrombie and Fitch traded up 33.9% following the results while Gap was also up 12.7%.
Read our full analysis of Abercrombie and Fitch’s results here and Gap’s results here.
Over the past year, investors have repeatedly shifted their focus from one macro narrative to another (AI disruption and AI capex spending to geopolitics, interest rates, and the broader health of the economy). While some of the apparel retailer stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3.2% on average over the last month. Tilly's is up 5.3% during the same time and is heading into earnings with an average analyst price target of $5.50 (compared to the current share price of $4.18).
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