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Why Tilly's Stock Just Popped 20%

By Rich Smith – Aug 29, 2019 at 12:56PM

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Earnings beat expectations, and guidance isn't half bad, either.

What happened

Shares of shoes and clothing store chain Tilly's (TLYS 5.00%) rocketed on strong earnings Thursday, and are up 20.1% as of 12:20 p.m. EDT.

Expected to earn $0.20 per share on sales of $155.9 million, Tilly's instead reported a $0.31 per share profit on $161.7 million in sales.  

Cartoon teacher explains a rising stock chart with a pointer

Image source: Getty Images.

So what

Tilly's profits were actually down slightly from the $0.33 per share that it earned in last year's second quarter -- but not down nearly as badly as Wall Street had feared.  

Management explained that although it had "a slow start to the second quarter during May," same-store sales turned positive "during each of June and July to finish the quarter with better net sales, product margins, and earnings per share than expected." Ultimately, the shoes and clothing company ended the quarter with comps up 0.6% against last year's Q2, thanks largely to a 15.7% increase in e-commerce sales.

Now what

Investors also liked Tilly's guidance, which calls for even better same-store sales growth (15 to 4%) and earnings of $0.18 to $0.22 per share during the fiscal third quarter currently under way, neatly bracketing Wall Street's expected $0.20 per share profit. Sales, predicted to come in between $151 million and $156 million, could actually come in a bit ahead of consensus expectations of $153 million if they land in the midpoint of that range.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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