Tilly's, Inc. (NYSE: TLYS) reported Q1 EPS of ($0.01), $0.09 better than the analyst estimate of ($0.10). Revenue for the quarter came in at $120.9 million versus the consensus estimate of $114.35 million.

“We believe our initiatives are gaining traction. After a tough February, our combined March/April comparable store sales were up 5.3%, resulting in a positive comparable store sales result for the first quarter as a whole and our fourth consecutive quarter of year-over-year operating income improvement,” commented Ed Thomas, President and Chief Executive Officer.

First Quarter Results Overview

The following comparisons refer to operating results for the first quarter of fiscal 2017 versus the first quarter of fiscal 2016 ended April 30, 2016:

• Total net sales were $120.9 million, an increase of 0.6% from $120.2 million last year.
• Comparable store sales, which include e-commerce sales, increased 0.6%. Comparable store sales decreased 4.1% in the first quarter last year.
• Gross margin, or gross profit as a percentage of net sales, increased to 27.2% from 27.1% last year. The 10 basis point increase in gross margin was attributable to a 80 basis point reduction in buying, distribution and occupancy costs, offset by a 70 basis point decline in product margins from increased markdowns.
• Selling, general and administrative expenses (\"SG&A\") were $33.2 million, a decrease of $3.3 million from $36.6 million last year. As a percentage of net sales, SG&A improved 290 basis points to 27.5% from 30.4% last year. Last year\'s SG&A included $2.4 million for the combination of a legal provision and non-cash store asset impairment charges that were not repeated this year, which accounted for 200 of the 290 basis point improvement in SG&A this year. The remaining $0.9 million, or 90 basis points, of improvement in SG&A was primarily attributable to reduced marketing expenses.
• Operating loss was $0.3 million, or 0.3% of net sales, compared to an operating loss of $4.0 million, or 3.3% of net sales, last year. The 300 basis point improvement in our operating margin was primarily attributable to the reductions in SG&A noted above.
• Income tax expense was $0.1 million compared to an income tax benefit of $1.1 million last year. Despite our operating loss for the quarter, we incurred income tax expense due to certain discrete charges related to employee stock grant activity and required estimated tax payments in certain states.
• Net loss was $0.2 million, or $0.01 per share, compared to a net loss of $2.7 million, or $0.10 per share, last year.

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