Tilly's (TLYS) To Report Q3 Earnings: What's In The Offing?

Tilly’s, Inc. (NYSE:TLYS) is scheduled to report third-quarter fiscal 2019 numbers on Dec 4, after the closing bell. Over the trailing four quarters, the company’s bottom line outperformed the Zacks Consensus Estimate by 41.8%, on average.

The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 21 cents, indicating a decline of 12.5% from 24 cents reported in the year-ago quarter. The consensus estimate is near the high end of 18-22 cents provided by the company previously. Notably, the consensus estimate has been unchanged over the past 30 days.

The consensus mark for revenues is pegged at $154.7 million, up 5.3% from the year-ago quarter’s reported figure.

Tilly's, Inc. Price and EPS Surprise

Key Factors to Note

Tilly’s has been witnessing solid comps performance for quite some time, gaining from strong store and online traffic. Also, the company has been steadily expanding presence through store openings in existing markets, especially in Northeast Texas and Chicago. Further, its enhanced loyalty program and investment in customer-facing technologies have been helping to meet consumer demand.

The impacts of the above-mentioned factors are likely to get reflected in the top-line number for the quarter under review. On second-quarter earnings call, management had expected net sales of $151-$156 million and comps growth of 1-4% for the quarter under review.

While these tailwinds raise optimism, we cannot ignore the impact of stiff competition. Moreover, any deleverage in SG&A expenses on increase in store payroll, and rise in e-commerce marketing and fulfillment expenses might have hurt the company’s quarterly margins to an extent.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Tilly’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Tilly’s carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Dollar General Corporation (NYSE:DG) has an Earnings ESP of +0.47%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco Wholesale Corporation (NASDAQ:COST) presently has an Earnings ESP of +1.01% and a Zacks Rank #2.

Big Lots (NYSE:BIG) currently has an Earnings ESP of +3.85% and a Zacks Rank of 3.

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