Earnings Preview: Tilly’s set to report lower earnings in Q1

Tilly’s (NYSE: TLYS) will be reporting its first-quarter financial results on May 29 after the market’s close. The general perception is that the sports apparel retailer had a lackluster start to the year. Analysts forecast a 50% decline in earnings to $0.02 per share on revenues of $128.73 million, which represents a modest year-over-year increase.

Revenues of the California-based company, which is specialized in apparels and footwear used in the action sports industry, stand to benefit from positive comparable store sales. Meanwhile, the bottom line might be negatively impacted by higher costs. In recent quarters, sales got a boost from the management’s efforts to ramp up the digital retail platform.

Related: Tilly’s Q4 2018 Earnings Conference Call Transcript

Looking Back

For the fourth quarter of 2018, Tilly’s had reported a 17.4% growth in adjusted earnings to $0.27 per share – which also exceeding the expectations – aided by a decline in income tax expense. However, the market reacted negatively to the report as the management’s first-quarter guidance fell short of expectations.

Sales have benefitted from the management’s efforts to ramp up the digital retail platform

At $170.6 million, revenues were up 3.8% in the fourth quarter. Comparable store net sales, which includes e-commerce sales, increased by 6.4%.

What Experts Say

On average, analysts covering the stock have given it buy rating, with an average price target of $16. The relatively low price of the stock makes it an investment option worth considering ahead of the earnings report.

Tilly’s shares have maintained a consistent downtrend over the past several months, after retreating from last year’s record high. The stock is currently trading 2% below the levels seen at the beginning of the year. In the past twelve months, it lost about 8%.

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