After the bell, the stock had taken off 8.2% to $11.75.
"We continue to experience volatile and weak traffic trends and a highly promotional environment in teen retail," the company said in a statement.
The surf-and-skate clothing retailer said it expects first-quarter comparable-store sales to decline in the mid-single digits with net income break-even to 4 cents a share. Analysts surveyed by Thomson Reuters had forecast net income of 9 cents a share for the April-ending quarter.
Over its fourth quarter, the Irvine, Calif.-based chain recorded net sales of $139.9 million, in line with analysts' estimates, and net income of 19 cents a share, a penny higher than consensus.
Comparable-store sales decreased 4.9% over the three months to Feb. 1.
"While fourth quarter results were as expected, we are not satisfied with this level of financial performance," said CEO Daniel Griesemer in a statement.
TheStreet Ratings team rates TILLY'S INC as a Sell with a ratings score of D+. The team has this to say about their recommendation:
"We rate TILLY'S INC (TLYS) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, poor profit margins, weak operating cash flow and disappointing return on equity."