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Tilly's shares plunge on weak forecast

The Associated Press

Tilly's Inc. shares plunged to a new low Wednesday after the retailer reported a drop in its fiscal third-quarter net income, disappointing revenue and issued a weak outlook.

THE SPARK: The retailer reported Tuesday that it earned $9.3 million, or 33 cents per share, for its third quarter ended Oct. 27. That is down from $12.2 million, or 59 cents per share, a year ago. It earned 30 cents per share on an adjusted basis versus 34 cents per share last year. Its total revenue increased more than 16 percent to $124.9 million.

The adjusted earnings matched what analysts polled by FactSet were expecting, but they expected higher revenue of $128.7 million.

Tilly's also said that given some recent variability in sales trends it gave a more cautious outlook. It expects to earn 30 cents to 33 cents per share for the fourth quarter on an adjusted basis; analysts were expecting 35 cents per share. It also forecast earnings of 88 cents to 91 cents per share on an adjusted basis for the full year; analysts expected 92 cents per share.

THE BIG PICTURE: Tilly's, based in Irvine, Calif., sells West Coast inspired clothing, shoes and accessories at 161 stores and online. It went public at $15.50 per share on May 4.

SHARE ACTION: Shares fell $2.76, or 17.6 percent, to $12.90 in midday trading after falling to a new low of $12.50 earlier in the session. Its shares had traded as high as $19.57 in late August.