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Tilly's, Inc. Announces Holiday Period Comp Store Net Sales Increase 5.8%

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Updates Fiscal 2018 Fourth Quarter Outlook and Fiscal 2019 New Store
Expectations

Tilly's, Inc. (NYSE:TLYS, the "Company")) today announced comparable
store net sales results for the nine-week period ended January 5, 2019
(the "holiday period"), and provided updates on its fiscal 2018 fourth
quarter earnings outlook and fiscal 2019 new store expectations in
advance of its attendance at the annual ICR Conference in Orlando,
Florida on January 14-15, 2019.

"Tillys delivered its strongest holiday period comparable store net
sales increase since 2011, driven by strong e-commerce growth,"
commented Ed Thomas, President and Chief Executive Officer. "We are on
track to deliver our third consecutive year of operating margin
expansion despite a challenging retail environment."

  • Total net sales of $142.4 million increased by 8.3% for the holiday
    period from $131.5 million for last year's comparable nine-week
    holiday period ended January 6, 2018.
  • Comparable store net sales, including e-commerce, increased by 5.8%
    for the holiday period compared to an increase of 0.4% for last year's
    holiday period.
    • E-commerce net sales increased by 42.8% and represented
      approximately 19.3% of total net sales for the holiday period.
      E-commerce net sales decreased by 9.7% and represented
      approximately 14.6% of total net sales during last year's holiday
      period.
    • Comparable store net sales in physical stores decreased by 0.7%
      and represented approximately 80.7% of total net sales for the
      holiday period. Comparable store net sales in physical stores
      increased by 2.4% and represented approximately 85.4% of total net
      sales during last year's holiday period.
  • The Company's operating results for the holiday period were driven by
    strong e-commerce net sales, resulting in an increase in e-commerce
    shipping, marketing and fulfillment costs compared to last year. The
    strength of the Company's branded merchandise assortment resulted in
    an increase in the sales penetration of third-party brands relative to
    proprietary brands, resulting in incrementally lower product margins
    compared to last year due to lower initial markups.
  • Based on its operating results during the holiday period and
    historical trends, the Company now expects its earnings per diluted
    share for the fiscal 2018 fourth quarter ending February 2, 2019, to
    be approximately $0.24 to $0.26 per diluted share, within the upper
    half of its original earnings outlook range of $0.22 to $0.26 per
    diluted share. This outlook assumes an anticipated effective tax rate
    of approximately 27.3% and weighted average diluted shares of
    approximately 29.9 million based on the latest available information.
  • Based on the latest lease negotiations and available information, the
    Company now expects to open approximately 10 to 15 new, full-size
    stores during the fiscal 2019 year ending February 1, 2020. The
    Company had previously announced its intentions to open approximately
    15 to 20 new stores during fiscal 2019, subject to obtaining
    appropriate lease economics.
  • As previously disclosed, the Company issued nontransferable discount
    coupons to approximately 612,000 of its existing customers in early
    September 2018 pursuant to the settlement terms of a legal matter.
    These coupons allow for a one-time 50% discount on a single, future
    purchase transaction of up to $1,000. Any unused coupons will expire
    on September 4, 2019. From original issuance through the holiday
    period, approximately 1.3% of these coupons had been redeemed,
    resulting in no material impact on the Company's comparable store net
    sales or operating results as a whole. Although redemptions have been
    very low in number thus far, there can be no assurance that the impact
    of any future coupon redemptions during fiscal 2019 will remain
    immaterial.

The Company's actual financial results for the fiscal 2018 fourth
quarter and full fiscal year are subject to completion of the period,
finalization of its normal quarter-end and year-end accounting
procedures, and the audit of its fiscal 2018 financial statements. The
Company currently expects to report its actual results for the fiscal
2018 fourth quarter and full fiscal year on or about March 14, 2019.

ICR Conference 2019

The Company will be presenting at the ICR Conference 2019 on Monday,
January 14, 2019 at 8:30 a.m. Eastern Standard Time. The audio portion
of the presentation will be webcast live over the internet and can be
accessed under the Investor Relations section of the Company's website
at www.tillys.com.

About Tillys

Tillys is a leading specialty retailer of casual apparel, footwear and
accessories for young men, young women, boys and girls with an extensive
assortment of iconic global, emerging and proprietary brands rooted in
an active and outdoor lifestyle. Tillys is headquartered in Irvine,
California and currently operates 229 total stores, including four
RSQ-branded pop-up stores, across 33 states and its website, www.tillys.com.

Forward Looking Statements

Certain statements in this press release and oral statements made from
time to time by our representatives are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. In particular, statements regarding our future financial and
operating results, including but not limited to future comparable store
net sales, future operating income, future net income, future earnings
per share, future gross, operating or product margins, anticipated tax
rate, future impacts of legal settlements, future inventory levels,
future capital expenditures, and market share and our business and
strategy, including but not limited to expected store openings and
closings, expansion of brands and exclusive relationships, development
and growth of our e-commerce platform and business, promotional
strategy, and any other statements about our future expectations, plans,
intentions, beliefs or prospects expressed by management are
forward-looking statements. These forward-looking statements are based
on management's current expectations and beliefs, but they involve a
number of risks and uncertainties that could cause actual results or
events to differ materially from those indicated by such forward-looking
statements, including, but not limited to, our ability to respond to
changing customer preferences and trends, attract customer traffic at
our stores and online, execute our growth and long-term strategies,
expand into new markets, grow our e-commerce business, effectively
manage our inventory and costs, effectively compete with other
retailers, enhance awareness of our brand and brand image, general
consumer spending patterns and levels, the effect of weather, and other
factors that are detailed in our most recent Annual Report on Form 10-K,
filed with the Securities and Exchange Commission ("SEC"), including
those detailed in the section titled "Risk Factors" and in our other
filings with the SEC, which are available from the SEC's website at www.sec.gov
and from our website at www.tillys.com
under the heading "Investor Relations". Readers are urged not to place
undue reliance on these forward-looking statements, which speak only as
of the date of this press release. We do not undertake any obligation to
update or alter any forward-looking statements, whether as a result of
new information, future events or otherwise. This release should be read
in conjunction with our financial statements and notes thereto contained
in our most recent Form 10-K and any subsequent reports filed with the
SEC.

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