INVESTOR PRESENTATION January 2013

DISCLAIMER
Forward Looking Statements
Certain statements in this presentation 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
guidance, future financial and operating results and any other statements about our future expectations, beliefs or prospects
expressed by management are forward-looking statements. These forward-looking statements are based on managements
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, execute our growth strategy, expand into new markets, effectively compete with other retailers,
enhance our brand image and other factors that are detailed in our registration statement on Form S-1 (333-175299), including
those detailed in the section titled Risk Factors contained in that registration statement, and in our other filings with the SEC,
which are available from the SECs 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
such statements are made. 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.
Use of Non-GAAP Financial Measures
In addition to reporting financial measures in accordance with generally accepted accounting principles in the United States
(GAAP), the company provides non-GAAP adjusted selling, general and administrative expenses, adjusted operating
income, adjusted income before income taxes, adjusted income tax provision, adjusted net income, adjusted basic
earnings per share and adjusted diluted earnings per share. These amounts are not in accordance with, or an alternative to,
GAAP. The companys management believes that these measures provide investors with transparency by helping illustrate the
financial results: (i) as if the company had been a publicly traded C Corporation during the relevant time periods, in order to
provide a better comparison of past periods to current periods as a C Corporation; and (ii) to exclude items that may not be
indicative of, or are unrelated to, the companys core operating results, providing a better baseline for analyzing trends in the
underlying business. A reconciliation to U.S. GAAP can be found in our most recent earnings release, available on our website at
www.tillys.com.

Introductions

4 Dan Griesemer

President and Chief Executive Officer

4 Bill Langsdorf

Senior Vice President and Chief Financial Officer

Who We Are

4 Fast-growing destination specialty

retailer of the most sought-after
brands for our customer
4 Dominant assortment in a larger store
format
4 Rapidly growing e-commerce
platform and successful catalog
4 Proven success in different real estate
venues and geographies, with a 30
year history

Historical Store Growth and Potential

Number of States
5
14

2007
2011

500 +

140
73

2007

2011

Potential

2011 Financial Overview

Net Sales
Growth vs. 2010

4 Compelling store-level economics

Comparable Store Sales

4 Best-in-class systems and distribution

infrastructure to support growth

Operating Income
Operating Margin

$400.6mm
20.5%
10.7%
$34.9mm
8.7%

Comparable store sales include e-commerce sales.

Our Customer and The Tillys Experience

If its not here.its not happening
4 Core
Customer

4 14 to 24 year old teens and young adults

4 Passionate about action sports, music, art and fashion
4 Dynamic, multitasking lifestyle

4 The Tillys
Experience

4 Customer-driven, lifestyle brand focused on shopping

as a fun, social experience
4 Stores provide a stimulating environment, full of energy
and activity
4 Carry the most relevant brands and styles blended with
music videos and product-related visuals
4 Passionate store associates live the lifestyle and easily
engage with our customers
4 We are where our customers want to shop the right
markets and venues plus e-commerce and catalog

Investment Highlights and

Long-Term Targets
Significant Growth Opportunities

Long-Term Targets

4 Expand Our Store Base

Store Count

4 Drive Comparable Store Sales

Annual Square
Footage Growth

4 Grow Our E-Commerce Platform

4 Increase Our Operating Margin

Annual Comparable
Store Sales Growth1

500+

Mid-teens

4% 5%

Operating Income Margin

High-single
digits

Pro Forma Net

Income Growth

High-teens

Comparable store sales include e-commerce sales.

DRAFT CONFIDENTIAL

I. Business Strategy

Destination Retailer With a Broad,

Relevant Assortment

4 Broader, deeper selection of brands, styles,

colors, sizes and price points than many
other specialty retailers
4 Established and emerging third-party brands
complemented by proprietary brands
4 Balanced mix of guys and juniors with
additional merchandise in boys, girls,
footwear and accessories

2011 Sales Mix

Proprietary
Brands
31%
Third-Party
Brands
69%

4 Combination of proven fashion trends and

core style products
4 Vibrant blend of carefully selected music and
visuals to create authentic, engaging in-store
experience

Dynamic Merchandise Model

4 Dominant assortment of newness from the most relevant brands

4 Regularly introduce emerging third-party brands not available at many other
retailers
4 Use breadth of merchandise selection to quickly identify emerging fashion trends
4 Broad vendor base for proprietary products provides flexibility to:
4 Capitalize on emerging fashion trends
4 Expand price point range
4 Fill merchandise gaps
4 Provide deeper selection of styles and colors for proven categories
4 Merchandise delivered to stores five times per week

Flexible Real Estate Strategy Across

Real Estate Venues and Geographies

4 Profitable stores in a variety of real estate venues and geographies

4 High traffic malls that dominate their trade area
4 Off-mall power and neighborhood centers
4 National footprint with stores on both coasts
4 Operate stores that average 7,850 sq ft in 60 markets in 28 states
4 Currently operate 168 stores in 28 states
4 Disciplined process to identify, build out and merchandise new stores
Stores By Real Estate Venue (January 2013)

Off-Mall
47%

Mall
53%

10

Multi-Pronged and Differentiated

Marketing Capabilities

4 Multi-pronged marketing strategy includes catalog, in-store events and contests,

social media, grass roots community programs and traditional media
Catalog

Brand Partnerships

4 Differentiated sales and

marketing tool drives
traffic to our stores and
website

4 Allows Tillys to connect

with and engage customers
in an exciting, authentic
experience

4 Reinforces the Tillys

brand and showcases
comprehensive
assortment

4 Organized over 185

exclusive events in 2011,
including autograph
signings, contests, in-store
performances and VIP trips

4 Mailed ~8.8 million

catalogs in 2012
4 Maintain proprietary
database of over 2.8
million customers, up
from 1.9 million in early
2012

4 Collaborate with musicians,

celebrities and action
sports athletes
4 Builds brand awareness
and strengthens vendor
relationships with minimal
investment

e-Marketing
4 Builds awareness, drives
traffic to stores and
website and highlights
local in-store promotions
and events
4 Email marketing serves as
effective channel to
introduce new brands
and products
4 Website blog, Facebook
and Twitter used as viral
marketing platform to
communicate to
customers while allowing
them to interact with one
another and provide
feedback

11

Sophisticated Systems and Distribution

Infrastructure to Support Growth

4 Over $30 million invested in highly automated distribution center and information
systems since 2003
4 Existing infrastructure can support national retail footprint in excess of 500 brickand-mortar stores with minimal incremental investment
4 Best-in-class distribution and allocation capabilities
4 Recent investments focused on systems automation, material-handling
equipment, RF technologies and automated sortation
Distribution Facilities
Location
Irvine, CA

Size (sq. ft.) Purpose

126,000

Stores

Irvine, CA (2012)

26,000

Stores

Irvine, CA (2013E)

81,000

e-Commerce

Total

233,000

12

DRAFT CONFIDENTIAL

II. Growth Strategy

Store Base Expansion Opportunity

4 Opportunity to expand store footprint from 168 stores currently to 500+ locations over the
next ten years
4 National rollout and best location approach
4 Targeting new store openings in new and current geographies, and in both mall and
off-mall real estate venues
4 Added a net 28 new stores in 2012 and expect to grow the store base by ~15% per year for the
next several years thereafter

14

Store Base Expansion Opportunity

4 Compelling new store economics with

attractive payback period of ~18 months
4 Rigorous site selection process
4 People and systems in place to
execute new store growth plan
4 CEO and CFO approval for all
new sites

New Store Target Economics

Target Store Size (sq. ft.)
First Year Sales

$2,200,000

First Year Cash Flow

$300,000

Second Year Cash Flow

$400,000

Net Investment

$500,000 $550,000

Payback Period

~18 Months

4 Demonstrated portability with success

across a variety of real estate venues and
geographies

Historical Store Count

168

4 Target high productivity malls

that dominate trade areas
4 Target key power and neighborhood
centers that serve as community
destinations

7,500 8,000

99

111

125

140

140

73

2007

2008

28

2009

2010

2011

2012

15

Drive Comparable Store Sales

4 Increasing momentum as Tillys continues to build brand awareness in new

markets and benefit from maturing stores that are less than three years old
4 Over the last six years, Tillys has more than doubled store count while
entering 49 new markets
4 Consistently offering new, on-trend and relevant merchandise across a broad
assortment of categories
4 Offering a stimulating and engaging shopping environment that embodies our
target customers lifestyles and attitudes
4 Increasing brand awareness and driving higher traffic to stores through multipronged marketing approach
4 Maintaining high level of customer service
4 e-Commerce growth

16

Grow Our e-Commerce Platform

($ in millions)

4 Grow e-commerce business from ~11% of total net sales today to ~15% over time
4 Wider selection of merchandise than offered in-store, including internet exclusives
4 e-Commerce channel allows us to:
4 Reach customers where we dont currently have stores
4 Communicate with customers about upcoming events and promotions
4 Drive customers to website through search, affiliates, catalog, email marketing and social media
$ 43.6
$ 32.8
$ 22.5
$ 12.2

% of Total
Net Sales

$ 15.4

2007

2008

2009

2010

2011

5.0%

6.1%

8.0%

9.9%

10.9%

17

Increase Our Operating Margins

4 Opportunity to drive margin expansion through scale efficiencies and

continued process improvements
4 Continue to improve store sales productivity
4 Leverage economies of scale and existing infrastructure
4 Operating efficiency initiatives

18

DRAFT CONFIDENTIAL

III. Financial Overview

Self-Funded, Sustained Growth

and Profitability

($ in millions)

Net Sales

Operating Income
$ 400.6

$ 282.8

$ 34.9

$ 332.6
$ 21.4

YoY % Growth
Net Sales
Sq. ft.

2009
10.9%
11.2%

2010

2011

17.6%
12.1%

20.5%
13.2%

Cash Flows from Operations

% Margin

$ 24.9

2009

2010

2011

7.6%

7.5%

8.7%

Capital Expenditures

$ 39.1
$ 32.1
$ 27.1

$ 17.5

$ 20.2
$ 15.7

$ 4.1

$ 6.4
$ 11.1

2009

2010

2011

$ 13.3

2009
2010
New Stores and Remodels

$ 16.1

2011
Infrastructure

Pro forma for 40% tax rate.

20

Q3 2012 Results
($ in millions)

Balance Sheet Summary (Oct 27, 2012)

Operating Highlights
4 Comparable store sales of 1.9% on top of 8.5%
increase in Q3 11

Cash and marketable securities

$49.8

4 Gross margin rate increased by 10 bpts

Accounts receivable

$8.1

4 Adjusted SG&A rate(1) decreased by 10 bpts,

even while opening 7 new stores during the
quarter for a total of 161 stores at quarter end

Inventories

$49.9

Current liabilities

$50.1

Shareholders equity

$106.7

Working capital

$68.1

4 E-commerce sales increased 17% compared to

Q3 11, to 10.4% of net sales
4 On an adjusted(1) basis, net income for the
quarter increased 19%, adjusted(1) EPS was at
the high end of the outlook range
4 Subsequent to end of third quarter, completed
annual new store openings for a total of 28 net
new stores opened in 2012

Credit facility untapped

Minimal debt (only a capital lease)

Growth expected to be self-funded

Capital expenditures in FY 2012 expected to be in

the range of $35 million to $40 million

Adjusted numbers assume an effective tax rate of 40% for both periods and include an ongoing charge for stock compensation expense in Q3
2011 that equals a similar ongoing charge in Q3 2012
(1)

21

Holiday Sales
Updated Outlook
Reported Holiday Sales 2012
4 Comp store sales for the 10 weeks to January 5, 2013 of -1%, compared to +5% for the prior year period to
January 7

Fourth Quarter 2012 Outlook

4 GAAP net income of $9.0 million to $9.3 million, or $0.32 to $0.33 per diluted share
4 Adjusted net income(1) of $8.1 million to $8.4million, or $0.29 to $0.30 per diluted share

Full Year Fiscal 2012 Outlook (includes a 53rd week)

4 GAAP EPS of $0.89 to $0.90 per diluted share
4 Adjusted EPS(1) of $0.87 to $0.88 per diluted share

(1)

Q4 and full year adjusted to 40% long-term expected tax rate; full year also reflects exclusion of one-time stock comp
expense charge in Q2 2012 but includes ongoing stock comp expense charges and incremental public company costs.

22

DRAFT CONFIDENTIAL

IV. Appendix

INVESTOR PRESENTATION January 2013

Stores By State (January 2013)

State
Arizona
California
Colorado
Delaware
Florida
Georgia
Iowa
Illinois
Indiana
Kentucky
Maryland
Massachusetts
Michigan
Minnesota
Nevada

#of Stores
18
79
3
1
16
1
1
2
2
1
2
2
1
1
6

State
New Jersey
New York
N. Carolina
Ohio
Oregon
Pennsylvania
South Dakota
Tennessee
Texas
Utah
Virginia
Washington
Wisconsin
Total

#of Stores
7
3
2
1
2
2
1
1
2
3
3
2
3
168