What Happened?
A number of stocks fell in the afternoon session after reports pointed to a broad-based weakening of consumer health, highlighted by rising loan delinquencies and falling spending intentions.
This downturn was fueled by multiple reports signaling a deteriorating financial situation for consumers. Data revealed that even upper-income Americans are increasingly falling behind on credit card and auto loan payments, suggesting big-ticket spending is fading. Further dampening sentiment, the latest Consumer Confidence report, despite a headline increase, showed that consumers are being more cautious. The auto sector also flashed warning signs, with projections for July showing flat sales compared to last year, weighed down by high prices and interest rates.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Apparel Retailer company Tilly's (NYSE:TLYS) fell 8.5%. Is now the time to buy Tilly's? Access our full analysis report here, it’s free.
- Vehicle Retailer company Lithia (NYSE:LAD) fell 5.1%. Is now the time to buy Lithia? Access our full analysis report here, it’s free.
- Department Store company Kohl's (NYSE:KSS) fell 6.6%. Is now the time to buy Kohl's? Access our full analysis report here, it’s free.
- Home Furniture Retailer company Sleep Number (NASDAQ:SNBR) fell 6.7%. Is now the time to buy Sleep Number? Access our full analysis report here, it’s free.
- Footwear Retailer company Designer Brands (NYSE:DBI) fell 5.5%. Is now the time to buy Designer Brands? Access our full analysis report here, it’s free.
Zooming In On Tilly's (TLYS)
Tilly’s shares are extremely volatile and have had 73 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 10.7% on the news that the company announced the appointment of Nate Smith as its new President and Chief Executive Officer.
Smith was scheduled to take the helm on August 18, 2025, and also join the company's Board of Directors. The leadership change saw company co-founder Hezy Shaked transition from his dual role as President and CEO to Executive Chairman. The positive investor reaction appeared to stem from Smith's previous executive experience at companies like Marolina Outdoor Inc., Boardriders Inc., and Oakley. Reports indicated the leadership change was aimed at revitalizing the Tilly's brand and improving business performance, with Shaked expressing confidence in Smith's strategic vision.
Tilly's is down 58.2% since the beginning of the year, and at $1.91 per share, it is trading 67.7% below its 52-week high of $5.90 from August 2024. Investors who bought $1,000 worth of Tilly’s shares 5 years ago would now be looking at an investment worth $303.34.
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