Torrid Holdings Inc. Sees Decline in Q2 Earnings, Falls Short of Projections
Earnings Performance: Torrid Holdings Inc. reported a second-quarter earnings drop to $1.57 million ($0.02 per share), down from $8.33 million ($0.08 per share) last year, missing analysts' expectations of $0.03 per share.
Revenue Decline: The company's revenue decreased by 7.7% to $262.81 million compared to $284.64 million in the same quarter last year, with future revenue guidance set between $235 million and $245 million for the next quarter.
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Torrid Plans to Close 180 Stores to Shift Towards Digital Business
- Market Growth Potential: The women's plus-size clothing market is projected to generate $23.6 billion in revenue in 2024 and reach $37.4 billion by 2033, growing at a CAGR of 6.5%, indicating a rising demand for inclusive fashion.
- Retail Transformation Strategy: Torrid plans to close up to 180 underperforming stores by the end of 2025 to reduce fixed costs and reinvest in customer acquisition and omnichannel enhancements, reflecting a broader retail shift towards digital channels.
- Sales Performance Decline: Torrid reported a 10.8% year-over-year decline in net sales to $235.2 million in the third quarter, with a net loss of $6.4 million, highlighting the pressures and need for adjustments in a competitive market.
- Future Planning Adjustments: For 2026, Torrid aims to implement a more strategically balanced assortment architecture, with approximately 30% of offerings at opening price points, designed to enhance customer value and competitiveness in response to evolving consumer demands.
Torrid Holdings (CURV) Price Target Reduced by 22.88% to $1.50
Price Target Revision: The average one-year price target for Torrid Holdings (NYSE:CURV) has been revised down to $1.50 per share, a decrease of 22.88% from the previous estimate of $1.95, although it represents a 39.31% increase from the latest closing price of $1.08.
Fund Sentiment: There are 157 funds reporting positions in Torrid Holdings, with a decrease of 14 funds (8.19%) in the last quarter. The average portfolio weight for these funds is 0.03%, which has increased by 11.27%, while total shares owned by institutions decreased by 2.50% to 85,426K shares.
Shareholder Activity: Sycamore Partners Management remains the largest shareholder with 58.77% ownership, while Fund 1 Investments reduced its stake by 6.30%. Nomura Holdings increased its holdings by 48.68%, and Citadel Advisors also increased its shares by 6.82%, despite reducing their portfolio allocation significantly.
Fintel Overview: Fintel provides comprehensive investing research tools, including fundamentals, analyst reports, ownership data, and options sentiment, aimed at individual investors and small hedge funds to enhance their investment strategies.
Analysts Believe Torrid's Narrative is Changing as Cost Reductions Enhance Value Amid Rising Growth Risks
Stock Valuation Update: Torrid Holdings' fair value estimate has increased slightly to $1.48 per share, despite a cautious long-term growth outlook due to store closures, tariff pressures, and macroeconomic uncertainties.
Analyst Perspectives: William Blair downgraded Torrid to Market Perform, highlighting risks associated with ongoing restructuring and the potential impact of store closures on traffic and revenue retention.
Fiscal 2025 Guidance: The company projects net sales between $995M and $1.002B for fiscal 2025, emphasizing cost discipline and operational efficiencies to protect margins amid softer demand.
Future Outlook: Analysts note that ongoing tariff and macro headwinds may limit near-term valuation upside, making future quarterly updates and guidance revisions critical for investors.
Analysts Downgrade Torrid Holdings Forecasts After Q3 Loss
Third Quarter Loss: Torrid Holdings Inc reported a net loss of $6.4 million for the third quarter, a significant increase from a loss of $1.2 million in the same period last year, with net sales declining by 10.8%.
CEO's Statement: CEO Lisa Harper attributed the disappointing results to execution missteps that were largely controllable by the company.
Fiscal Year Projections: For the full fiscal year, Torrid expects net sales between $995 million and $1.002 billion, with adjusted EBITDA projected at $59 million to $62 million.
Stock Performance and Analyst Reactions: Following the earnings announcement, Torrid's shares fell 12.8%, and analysts adjusted their price targets, with Telsey Advisory Group lowering it from $3 to $2, while B of A Securities cut theirs from $6 to $2.
Thursday's Underperforming Sectors: General Contractors & Builders, Apparel Retailers
Apparel Store Performance: Apparel store shares are down approximately 2.2% overall, with significant declines from Genesco (down 29.1%) and Torrid Holdings (down 13.5%).
Market Sector Laggards: The apparel sector is identified as one of the lagging sectors in the market on Thursday, alongside general contractors and builders.
Author's Perspective: The views expressed in the article are solely those of the author and do not necessarily represent Nasdaq, Inc.
Video Content: A video segment highlights the sector laggards, specifically focusing on general contractors, builders, and apparel stores.
What’s Causing the After-Hours Decline in Torrid Holdings (CURV) Stock?
Stock Performance: Torrid Holdings Inc. shares fell 14.5% to $1.12 after reporting a third-quarter net loss of $6.4 million, compared to a loss of $1.2 million in the same quarter last year.
Financial Results: The company experienced a 10.8% decline in net sales, totaling $235.2 million, with comparable sales down 8.3%. The gross profit margin also decreased to 34.9% from 36.1% year-over-year.
CEO's Statement: CEO Lisa Harper acknowledged that the disappointing results were due to execution missteps and an imbalance in the product assortment, despite some core categories showing growth.
Future Outlook: For fiscal 2025, Torrid expects net sales between $995 million and $1.002 billion, with plans to close up to 180 stores, having already closed 74, reducing its total to 560 stores.
Torrid Plans to Close 180 Stores to Shift Towards Digital Business
- Market Growth Potential: The women's plus-size clothing market is projected to generate $23.6 billion in revenue in 2024 and reach $37.4 billion by 2033, growing at a CAGR of 6.5%, indicating a rising demand for inclusive fashion.
- Retail Transformation Strategy: Torrid plans to close up to 180 underperforming stores by the end of 2025 to reduce fixed costs and reinvest in customer acquisition and omnichannel enhancements, reflecting a broader retail shift towards digital channels.
- Sales Performance Decline: Torrid reported a 10.8% year-over-year decline in net sales to $235.2 million in the third quarter, with a net loss of $6.4 million, highlighting the pressures and need for adjustments in a competitive market.
- Future Planning Adjustments: For 2026, Torrid aims to implement a more strategically balanced assortment architecture, with approximately 30% of offerings at opening price points, designed to enhance customer value and competitiveness in response to evolving consumer demands.
Torrid Holdings (CURV) Price Target Reduced by 22.88% to $1.50
Price Target Revision: The average one-year price target for Torrid Holdings (NYSE:CURV) has been revised down to $1.50 per share, a decrease of 22.88% from the previous estimate of $1.95, although it represents a 39.31% increase from the latest closing price of $1.08.
Fund Sentiment: There are 157 funds reporting positions in Torrid Holdings, with a decrease of 14 funds (8.19%) in the last quarter. The average portfolio weight for these funds is 0.03%, which has increased by 11.27%, while total shares owned by institutions decreased by 2.50% to 85,426K shares.
Shareholder Activity: Sycamore Partners Management remains the largest shareholder with 58.77% ownership, while Fund 1 Investments reduced its stake by 6.30%. Nomura Holdings increased its holdings by 48.68%, and Citadel Advisors also increased its shares by 6.82%, despite reducing their portfolio allocation significantly.
Fintel Overview: Fintel provides comprehensive investing research tools, including fundamentals, analyst reports, ownership data, and options sentiment, aimed at individual investors and small hedge funds to enhance their investment strategies.
Analysts Believe Torrid's Narrative is Changing as Cost Reductions Enhance Value Amid Rising Growth Risks
Stock Valuation Update: Torrid Holdings' fair value estimate has increased slightly to $1.48 per share, despite a cautious long-term growth outlook due to store closures, tariff pressures, and macroeconomic uncertainties.
Analyst Perspectives: William Blair downgraded Torrid to Market Perform, highlighting risks associated with ongoing restructuring and the potential impact of store closures on traffic and revenue retention.
Fiscal 2025 Guidance: The company projects net sales between $995M and $1.002B for fiscal 2025, emphasizing cost discipline and operational efficiencies to protect margins amid softer demand.
Future Outlook: Analysts note that ongoing tariff and macro headwinds may limit near-term valuation upside, making future quarterly updates and guidance revisions critical for investors.
Analysts Downgrade Torrid Holdings Forecasts After Q3 Loss
Third Quarter Loss: Torrid Holdings Inc reported a net loss of $6.4 million for the third quarter, a significant increase from a loss of $1.2 million in the same period last year, with net sales declining by 10.8%.
CEO's Statement: CEO Lisa Harper attributed the disappointing results to execution missteps that were largely controllable by the company.
Fiscal Year Projections: For the full fiscal year, Torrid expects net sales between $995 million and $1.002 billion, with adjusted EBITDA projected at $59 million to $62 million.
Stock Performance and Analyst Reactions: Following the earnings announcement, Torrid's shares fell 12.8%, and analysts adjusted their price targets, with Telsey Advisory Group lowering it from $3 to $2, while B of A Securities cut theirs from $6 to $2.
Thursday's Underperforming Sectors: General Contractors & Builders, Apparel Retailers
Apparel Store Performance: Apparel store shares are down approximately 2.2% overall, with significant declines from Genesco (down 29.1%) and Torrid Holdings (down 13.5%).
Market Sector Laggards: The apparel sector is identified as one of the lagging sectors in the market on Thursday, alongside general contractors and builders.
Author's Perspective: The views expressed in the article are solely those of the author and do not necessarily represent Nasdaq, Inc.
Video Content: A video segment highlights the sector laggards, specifically focusing on general contractors, builders, and apparel stores.
What’s Causing the After-Hours Decline in Torrid Holdings (CURV) Stock?
Stock Performance: Torrid Holdings Inc. shares fell 14.5% to $1.12 after reporting a third-quarter net loss of $6.4 million, compared to a loss of $1.2 million in the same quarter last year.
Financial Results: The company experienced a 10.8% decline in net sales, totaling $235.2 million, with comparable sales down 8.3%. The gross profit margin also decreased to 34.9% from 36.1% year-over-year.
CEO's Statement: CEO Lisa Harper acknowledged that the disappointing results were due to execution missteps and an imbalance in the product assortment, despite some core categories showing growth.
Future Outlook: For fiscal 2025, Torrid expects net sales between $995 million and $1.002 billion, with plans to close up to 180 stores, having already closed 74, reducing its total to 560 stores.
