Tilly’s Store Closures and Debt Draw StockStory Caution

StockStory said it is cautious on Tilly’s, citing store closures, a record of operating losses and debt exceeding cash. The shares were up 12.8% since March, compared with a 22.1% gain for the S&P 500, according to the publisher.

Tilly’s listed 220 locations in its latest quarter, while its store count declined by an average of 5% annually over the past two years, StockStory said. The publisher said the retailer’s operating margin averaged negative 3.1% over that period, though it was profitable operationally in the latest quarter.

The analysis also highlighted $218.4 million in debt against $62.2 million in cash. StockStory cited a net-debt-to-EBITDA ratio of 13 times, based on $12.35 million in EBITDA over the past 12 months.

StockStory said Tilly’s shares traded at 32.8 times forward earnings in its analysis, with a price of $4.47. As of Tuesday afternoon, the shares traded at $4.47, up 4.81% from the previous close.