Tilly's Profit Down, But Tops View; Shares Up 18%

(RTTNews) - Tilly's Inc. (TLYS) on Wednesday reported a lower profit for the third quarter, despite growth in revenues and gross margins as the teen apparel retailer was hurt by higher operating costs. Nonetheless, earnings and revenue for the quarter trumped Wall Street estimates, sending its shares up 18 percent in the after-hours trade on the New York Stock Exchange.

Irvine, California-based Tilly's third-quarter profit dropped to $5.1 million or $0.18 per share from last year's profit of $6.1 million or $0.22 per share. Analysts polled by Thomson Reuters estimated earnings of $0.11 per share for the quarter.

Sales for the third quarter rose to $131.3 million from $123.8 million last year. Analysts had a consensus revenue estimate of $125.18 million for the quarter.

Comparable store sales, which include e-commerce sales, dropped 1.2 percent compared with last year. Gross margin improved to 30.9 percent from 30.6 percent last year. Selling, general and administrative expenses rose to $32.0 million from $27.7 million last year.

Moving ahead, CEO Daniel Griesemer said, "Our product offering continued to resonate well with our customer through November, giving us confidence that we are well positioned for the remaining holiday selling season."

Looking forward to the fourth quarter, the company expects comparable store sales to be flat to negative low single digits and earnings of $0.15 to $0.19 per share. Analysts currently estimate earnings of $0.18 per share for the quarter.

TLYS closed Wednesday's trading at $7.07, up $0.09 or 1.29%. The stock gained $1.24 or 17.54% in the after-hours trade.