Q3 2025 Tillys Inc Earnings Call Transcript
Key Points
- Tilly's Inc (TLYS) reported its first positive quarterly comparable net sales result since Q4 2021, with positive comps in each month of Q3 2025.
- The company saw an improvement in gross margin by 460 basis points compared to the previous year, driven by higher initial markups and lower markdowns.
- Tilly's Inc (TLYS) has successfully increased the sales penetration of its proprietary brands, aiming for approximately 40% on an annualized basis.
- The company has launched successful marketing initiatives, including a brand ambassador campaign with TikTok influencer Loren Gray, which aligns with their brand ethos.
- Tilly's Inc (TLYS) is implementing technological upgrades, such as an AI-driven price optimization tool, which has shown early signs of improving product margins and sell-through rates.
- Total net sales for Q3 2025 decreased by 2.7% compared to the previous year.
- Net sales from e-commerce decreased by 9%, primarily due to a significant reduction in clearance sales.
- The company reported a net loss of $1.4 million for Q3 2025, although this was an improvement from the previous year's loss.
- Tilly's Inc (TLYS) plans to close seven stores by the end of Q4 2025, reflecting a net decrease of 17 stores or 7.1% from the end of fiscal 2024.
- The company continues to face challenges with store traffic, which has been roughly flat quarter-to-date in Q4 2025.
Good afternoon, and welcome to Tilly's third-quarter 2025 earnings conference call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Gar Jackson, Investor Relations. Please go ahead.
Thank you, operator. Good afternoon, and welcome to the Tilly's fiscal 2025 third quarter earnings call. Nate Smith, President and Chief Executive Officer; and Michael Henry, Executive Vice President and Chief Financial Officer, will discuss the company's business and operating results and then host a Q&A session.
For a copy of Tilly's earnings press release, please visit the Investor Relations section of the company's website at tillys.com. From the same section, shortly after the conclusion of the call, you will also be able to find a recorded replay of this call for the next 30 days. Certain forward-looking statements will be made during this call that reflect Tilly's judgment and analysis only as of today, December 3, 2025, and actual results may
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