What Happened?

Shares of young adult apparel retailer Tilly’s (NYSE: TLYS) fell 1.4% in the afternoon session after reports indicated strong Black Friday retail sales, especially within the apparel sector. 

Data from Mastercard SpendingPulse showed that U.S. retail sales, not including autos, climbed 4.1% year-over-year on Black Friday. The apparel category was a standout performer, with spending growing 5.7%. This increase was seen both online, which jumped 6.1%, and in physical stores, which rose 5.4%. Overall e-commerce sales also saw a significant boost, rising 10.4%. The strong consumer spending, particularly on clothing, suggested a healthy start to the crucial holiday shopping season for retailers like Tilly's.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Tilly's? Access our full analysis report here.

What Is The Market Telling Us

The previous big move we wrote about was 28 days ago when the stock dropped 3.3% on the news that investor concerns were raised regarding the company's declining sales and profitability. Reports highlighted that Tilly's experienced a 2.2% year-over-year decrease in comparable store sales, which was driven by reduced customer traffic and a drop in the number of transactions. In addition to the sales weakness, the company's gross margin contracted to 19.8%, falling short of consensus expectations and raising concerns about its financial health. Reflecting these weaknesses in the business, the stock's technical forecast was also downgraded to a "Sell candidate," signaling a negative outlook for its performance.

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