Torrid Holdings Inc. (CURV)·Q1 2026 Earnings Summary

Executive Summary

• Q1 FY2025 (company’s “Q1 2026”) delivered an EPS beat but a modest revenue miss vs S&P Global consensus: Diluted EPS $0.06 vs $0.045 estimate; Revenue $266.0M vs $270.2M estimate, as promotions and softer store traffic weighed on top line while cost control supported earnings . Estimates marked with * (Values retrieved from S&P Global).*
• Gross margin contracted 320 bps YoY to 38.1% due to planned promotional activity and corporate investments; Adjusted EBITDA of $27.1M was toward the high end of guidance .
• Management accelerated its digital-first pivot: online demand approached ~70% of total, and the company now plans to close up to ~180 underperforming stores in FY2025; FY net sales guidance cut to $1.030–$1.055B (from $1.080–$1.100B) primarily reflecting a pause in China-sourced footwear (-$40–$45M revenue, neutral EBITDA), while FY Adjusted EBITDA was trimmed to $95–$105M (from $100–$110M) .
• Potential stock catalysts: continued sub-brand outperformance and monthly drops, execution on store closures and customer transfer to digital, and tariff mitigation offsetting a ~$20M net headwind .

What Went Well and What Went Wrong

What Went Well

• Sub-brands materially outperformed (2–6x initial plans), attracting younger and reactivated customers; management targets sub-brands to reach up to ~30% penetration by 2026. “We’re doubling down…expect sub-brands to represent nearly a third of our business by 2026.”
• Digital channel gained share, with online demand approaching 70% and expected to reach low-to-mid-70% in 2026; digital is the preferred customer channel and stronger storyteller for assortment breadth .
• Profitability discipline: SG&A fell by ~$6.5M YoY to $70.0M; Adjusted EBITDA hit $27.1M (10.2% margin), in line with the upper end of guidance despite promotional pressure .

What Went Wrong

• Revenue softness vs estimates: Net sales of $266.0M missed S&P consensus $270.2M*, reflecting store traffic pressure and increased promotions; comparable sales declined 3.5% YoY .
• Margin compression: Gross margin fell 320 bps YoY to 38.1% as planned promotional activity supported conversion in a value-conscious environment .
• Guidance reduced on revenue and EBITDA: FY net sales lowered to $1.030–$1.055B and EBITDA to $95–$105M (vs $1.080–$1.100B and $100–$110M prior) as CURV pauses China-sourced footwear (-$40–$45M revenue in 2025) and absorbs a ~$20M net tariff headwind (to be offset via cost cuts and store optimization) .

Financial Results

Headline P&L and KPIs (oldest → newest)

Notes: Adj. EBITDA is non-GAAP; see reconciliations in filings .

Actual vs S&P Global Consensus (oldest → newest)

Estimates marked with * (Values retrieved from S&P Global).

Additional KPIs

• Digital mix: “approaching 70% of total demand” in Q1; expected low-to-mid-70% in 2026 .
• Loyalty engagement: ~95% of customers in the loyalty program, aiding customer transfer from closed stores to digital/nearby stores .
• Inventory: $149.6M at quarter end; year-end comparable store inventory expected to be down mid-to-high single digits .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered first quarter results in line with expectations, with $266 million in net sales and $27.1 million in Adjusted EBITDA—reflecting our continued focus on disciplined execution and profitability.” – CEO Lisa Harper .
• “Our sub-brand strategy is delivering positive results…we’re doubling down…expect sub-brands to represent nearly a third of our business by 2026.” – CEO .
• “We now plan to close up to 180 underperforming stores this year—allowing us to reduce fixed costs and reinvest in areas that drive long-term growth…digital continues to be our customer’s preferred channel, now approaching 70% of total demand.” – CEO .
• “Gross margin [declined] 320 basis points to 38.1%. The decline…was driven by planned promotional initiatives…We maintained an effective approach to expense management.” – CFO Paula Dempsey .
• “We expect the net impact of tariffs to be approximately $20 million…which we will offset primarily through discretionary expense reductions, store optimization, and prioritization of projects…[and] a temporary pause [in] shoe offerings…a neutral EBITDA impact in 2025 and an expected revenue loss of approximately $40–$45 million.” – CEO and PR .

Q&A Highlights

• Sub-brand cadence/new launches: Lovesick in August (younger, lower price point) and Studio Luxe in September (higher-end); by Q4, existing sub-brands move to monthly drops .
• Q2 outlook and revenue cadence: Deceleration tied to pausing shoe business (≈$45M revenue impact spread over the year) and choppy consumer demand; buying closer to need .
• Promotions: Promotional cadence consistent with history (TORR Cash 4x/year and two semi-annual sales); used to meet value-oriented demand, implied in guidance .
• Store closures math: Majority of closures occur late in FY, with ~60% customer/sales retention to nearby stores/digital; incremental marketing to offset remainder .

Estimates Context

• Q1 FY2025 vs S&P Global: EPS beat ($0.06 vs $0.045*) on SG&A discipline; revenue slight miss ($266.0M vs $270.2M*) amid softer store traffic and planned promotions .
• Recent trend: Mixed print trajectory—Q3 miss (revenue and EPS), Q4 beat (revenue and EPS), Q1 EPS beat but revenue miss—implies estimate models may need to reflect higher promo intensity and mix shift to digital while recognizing EBITDA protection from cost actions .
• Estimate breadth: 4 estimates each for Q1 revenue and EPS in S&P Global dataset.*

Estimates marked with * (Values retrieved from S&P Global).

Key Takeaways for Investors

• Execution on digital-led pivot is accelerating (online ≈70% of demand), with up to ~180 store closures in FY2025 to lower fixed costs and redeploy spend to acquisition/retention—management targets 150–250 bps EBITDA margin expansion in FY2026+ from fleet actions .
• Sub-brands are a genuine growth vector (2–6x plan) with favorable margin mix; monthly drops by Q4 should support frequency and AOV online, a key driver of digital LTV .
• Near-term cadence likely “choppy”; promotions remain necessary to capture value-conscious demand, pressuring gross margin, but SG&A control and marketing ROI discipline are cushioning EBITDA .
• FY guidance reset primarily reflects a temporary footwear pause (-$40–$45M revenue, neutral EBITDA) and quantified tariff headwind (~$20M) with clear offset plan; watch Q2 delivery vs $250–$265M sales and $18–$24M EBITDA guide as a checkpoint .
• Liquidity remains adequate ($141M), with cash of $23.7M; inventory healthy at $149.6M, and additional lease roll-offs provide flexibility for store actions .
• Trading setup: EPS resilience despite revenue variability suggests focus on margin/EBITDA durability and evidence of customer transfer post-closures; key catalysts are successful sub-brand scaling and proof of tariff/footwear mitigation playing out in H2 .

All non-GAAP references (Adjusted EBITDA) reconciled in company filings. Estimates marked with * (Values retrieved from S&P Global).

Citations: Q1 FY2025 8-K and press release ; Q1 call transcript ; Q4 FY2024 press release/8-K ; Q3 FY2024 press release/8-K .