William Blair's Sharon Zackfia upgraded Tilly's from Market Perform to Outperform.
Three takeaways from Tilly's earnings report justify a bullish stance on the stock, Zackfia said in the upgrade note.
The company showed improved comp momentum in the quarter, most notably in women's apparel, which accounts for 30 percent of sales, the analyst said. The momentum seen in the quarter should give investors confidence in Tilly's plans to grow its store count from its existing 226 locations today, she said.
The retailer not only posted better-than-expected EPS, revenue and gross margin in the quarter, but comps of 4.4 percent came in better than the consensus estimate of 1.5-2 percent, Zackfia said. Women's comps were positive for the first time since the second quarter of 2017, and comps came in positive in every department except boys, which was down less than 1 percent.
The 3.8-percent store-only comps gain at Tilly's marks its best performance since the third quarter of 2011, and traffic trends are now positive for seven consecutive quarters, the analyst said.
Tilly's shares were trading higher by 9.5 percent to $19.71 at the time of publication Thursday, above the stock's 52-week high of $18.06.
Analysts React To Target's Q2: 'This Is As Good As It Is Going To Get'
Dick's Sporting Goods Cites Under Armour's Distribution Strategy Change In Q2 Miss
Photo by Dough4872/Wikimedia.
Latest Ratings for TLYS
|Aug 2018||B. Riley FBR||Maintains||Buy||Buy|
|Aug 2018||William Blair||Upgrades||Market Perform||Outperform|
|Aug 2018||Pivotal Research||Initiates Coverage On||Buy|
View More Analyst Ratings for TLYS
View the Latest Analyst Ratings
See more from Benzinga
- This Technical Analyst Expects Amazon's Stock To Make A U-Turn
- Morgan Stanley Still Likes Salesforce
- The Street Debates Box: Buy The Dip Or Expect More Declines?
© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.