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Tilly's (TLYS) Q2 Earnings in Focus: Factors to Consider

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Tilly's, Inc. (TLYS - Free Report) is likely to register an increase in the top line when it reports second-quarter fiscal 2021 results on Sep 2, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $189.1 million, suggesting an improvement of 39.2% from the prior-year reported figure.

Meanwhile, the Zacks Consensus Estimate for second-quarter earnings per share has increased 7.1% to 45 cents over the past seven days. The figure indicates a sharp increase from earnings of 18 cents in the prior-year quarter.

The bottom line of this specialty retailer of casual apparel, footwear and accessories has surpassed the Zacks Consensus Estimate by a wide margin in the last reported quarter.

Factors to Note

Tilly's second-quarter performance is likely to have benefited from compelling merchandise offerings, focus on enhancing in-store experience to draw traffic, and a favorable consumer environment. Undoubtedly, relaxation in government restrictions, gradual return to in-person learning and federal stimulus checks have played a vital role behind improved consumer demand.

On its last earnings call, management highlighted that the second quarter has commenced on a promising note with a 30% increase in comparable net sales through May 31 compared to fiscal 2019's pre-pandemic second quarter.

Tilly's stated that total net sales for the second quarter through May 31, surged 104.7% year over year to $58 million. It further informed that net sales from physical stores came in at $47.1 million, reflecting an increase of 462.6% compared with the comparable period of fiscal 2020 ended Jun 1. However, net sales from e-commerce for the second quarter through May 31 declined 45.2% year over year to $11 million.

While aforementioned factors raise optimism regarding the to-be-reported quarter’s results, margins still remain an area to watch. Any deleverage in SG&A expenses might have weighed on the same. Also, a tight supply chain environment across the retail landscape remains a concern.

Tillys, Inc. Price, Consensus and EPS Surprise

Tillys, Inc. Price, Consensus and EPS Surprise

Tillys, Inc. price-consensus-eps-surprise-chart | Tillys, Inc. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Tilly's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Tilly's has an Earnings ESP of -4.44% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Signet Jewelers (SIG - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle Outfitters (AEO - Free Report) has an Earnings ESP of +0.66% and a Zacks Rank #3.

Costco (COST - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #3.

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