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Tilly's (TLYS) to Post Q4 Earnings: What Awaits the Stock?

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Tilly’s, Inc. (TLYS - Free Report) is likely to register top-line growth when it reports fourth-quarter fiscal 2020 numbers on Mar 11, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $175.4 million, which indicates an increase of 1.7% from the prior-year quarter’s reported figure.

However, the bottom line of this specialty retailer of apparel, footwear and accessories is expected to register a decline. The Zacks Consensus Estimate for fourth-quarter earnings is currently pegged at 19 cents per share. The consensus mark, which has remained stable in the past 30 days, suggests deterioration of 9.5% from earnings of 21 cents per share reported in the prior-year quarter.

Key Aspects to Note

Efficient inventory management strategies combined with growth in the online sales are likely to have supported Tilly’s top line during the fourth quarter. Speaking of the online sales, we note that consumers have been increasingly resorting to digital transactions, owing to increased stay-at-home practices amid the ongoing coronavirus pandemic. However, such trends have casted a pall over physical stores, which has been witnessing soft consumer traffic.

The aforementioned factors are well exemplified in the company’s sales numbers for the holiday shopping period — the nine-week period ended Jan 2, 2021. In the said duration, the company’s net sales increased 3.3% year on year. Impressively, total comparable net sales, including physical stores and e-commerce, rose 2.7%. Markedly, comparable net sales for Footwear, Women’s and Men witnessed a rise.  E-commerce net sales surged 65.2% during the said period. However, comparable net sales in physical stores fell 12.4%.

Additionally, we cannot ignore the concerns surrounding rising expenses that might have put some pressure on margins. The company is incurring higher shipping costs, mainly due to higher penetration of online sales.

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 doesn’t 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tilly’s currently carries a Zacks Rank #2 but has an Earnings ESP of 0.00%.

Stocks Poised to Beat Estimates

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.

Ulta Beauty Inc. (ULTA - Free Report) currently has an Earnings ESP of +6.24% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zumiez Inc. (ZUMZ - Free Report) currently has an Earnings ESP of +0.37% and a Zacks Rank #3.

Dollar General Corporation (DG - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank #3, at present.

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