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Shares of Tilly’s rose 5.6% on Friday after the apparel retailer delivered better-than-expected 2Q results. The upbeat quarterly performance was mainly driven by a surge in online sales which increased 128% to $52 million and contributed 38.3% to total revenues.
On Sept. 3, Tilly’s (TLYS) reported total sales of $135.8 million in 2Q that surpassed analysts’ expectations of $128 million. The company’s earnings of $0.18 per share also compared favorably with the Street estimates of a loss of $0.18 per share.
The retailer’s CEO said, "Our second quarter results were much better than we anticipated considering that the quarter started with all stores closed. The third quarter has been significantly impacted by the delay in back-to-school dates thus far, but we continue to carefully manage our inventory levels and expenses to protect our long-term health to the best of our ability in this largely unpredictable environment." (See TLYS stock analysis on TipRanks).
Following the quarterly results, B. Riley FBR analyst Jeff Van Sinderen raised the stock’s price target to $10 (36.6% upside potential) from $9 and reiterated a Buy rating. In a note to investors, Sinderen noted that the company has successfully reached rent reduction agreements with landlords for approximately 70% of its stores.
Currently, the Street has a cautiously optimistic outlook on the stock, with a Moderate Buy analyst consensus. The average price target of $9 implies upside potential of 23% to current levels. Shares are down 40.2% year-to-date.
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