Apparel retailer Tilly’s’ second-quarter results showed lower sales but stronger profitability, with operating income turning positive compared to a loss a year earlier.

For the quarter ending August 2, net sales decreased 7.1 per cent to $151.3 million, while comparable net sales, including both stores and e-commerce, declined 4.5 per cent.

However, gross profit was $49.1 million, or 32.5 per cent of sales, compared with $49.9 million, or 30.7 per cent, last year.

Meanwhile, the company’s operating income reached $2.7 million, equal to 1.8 per cent of sales, reversing an operating loss of $0.9 million a year earlier.

“We believe we are beginning to see the positive impacts of our efforts to stabilize our business,” said Hezy Shaked, co-founder and executive chairman.

“Our comparable net sales trend has improved each quarter since the end of fiscal 2024, including through fiscal August to begin the third quarter.” 

Meanwhile, for the first half of this fiscal year, net sales fell 7.1 per cent to $258.9 million, with comparable sales down 5.5 per cent.

Gross profit totalled $70.4 million, or 27.2 per cent of sales, compared to $74.2 million, or 26.6 per cent, last year.

The operating loss narrowed to $20 million from $21.6 million, while net loss was $19 million, compared with $19.7 million last year.

Following the results announcement, Shaked also welcomed the brand’s newly appointed CEO, Nate Smith. 

“I look forward to working with him and our team as we seek to continue building upon our progress made thus far toward generating improved sales results and profitability over time,” he added.

Tillys is a specialty retailer of casual apparel, footwear and accessories for young men, women and children. The company operates 231 stores across 33 states, as well as an e-commerce platform.