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Torrid Holdings Inc. (CURV)·Q4 2025 Earnings Summary

Executive Summary

  • Torrid’s Q4 delivered net sales of $275.6M and adjusted EBITDA of $16.7M, both above management’s Q3 guidance ranges; diluted EPS was -$0.03 as gross margin dipped 90 bps YoY to 33.6% on lower volume versus a 53rd-week prior-year comp .
  • Comparable sales were -0.8% with regular price comps +1.6%, reflecting improving mix and moderating clearance drag; cash ended at $48.5M and total liquidity at $158.0M, underscoring balance sheet strength .
  • FY 2025 guidance initiated: net sales $1.080–$1.100B, adjusted EBITDA $100–$110M, capex $15–$20M; Q1 2025 outlook: net sales $264–$274M and adjusted EBITDA $24–$28M; marketing is front-loaded to H1 to support sub-brand launches and acquisition .
  • Stock reaction catalysts: beats vs guidance, accelerating regular price trends, and a clear store optimization plan (40–50 closures, 4–8 openings) with demonstrated customer retention (60–70%) that should expand EBITDA margins over time .

What Went Well and What Went Wrong

  • What Went Well

    • Exceeded internal guidance: Q4 net sales above the $255–$270M guide and adjusted EBITDA above the $9–$15M guide; actuals were $275.6M and $16.7M, respectively .
    • Regular price momentum and sub-brand traction: regular price comps +1.6% with strong sell-through for Festy, Nightball, Retroshik attracting younger customers; “key items selling out quickly” and sub-brands “excluded from all discounting” .
    • Balance sheet and liquidity improved: year-end cash $48.5M, total liquidity $158.0M; operating cash flow rose to $77.4M; total debt reduced to $288.6M (from $312M) .

  • What Went Wrong

    • Gross margin compression: GM fell 90 bps to 33.6% on lower sales compared with prior year’s 53rd week (product margins up YoY excluding timing); SG&A mix remained elevated at 26.8% of net sales .
    • Persistent clearance/promo pressure: while clearance drag moderated, management expects “more promotional activity” given macro uncertainty, with product margins hedged to be roughly flat for FY 2025 .
    • Macro choppiness and weather impacts: early Q1 trend line improved after a “choppy start,” with February impacted by adverse weather; consumer conversion cautious despite traffic gains, necessitating prudent FY 2025 outlook .

Financial Results

MetricQ2 FY2024Q3 FY2024Q4 FY2024
Net Sales ($USD Millions)$284.6 $263.8 $275.6
Diluted EPS ($USD)$0.08 -$0.01 -$0.03
Gross Margin %38.7% 36.1% 33.6%
Adjusted EBITDA ($USD Millions)$34.6 $19.6 $16.7
Adjusted EBITDA Margin %12.2% 7.4% 6.1%
KPIQ2 FY2024Q3 FY2024Q4 FY2024
Comparable Sales (%)-0.8% -6.5% -0.8%
Regular Price Comp (%)+6.4% +1.0% +1.6%
Clearance Comp (%)-50% -47% Moderating (n/a)
Cash & Equivalents ($USD Millions)$53.9 $44.0 $48.5
Total Liquidity ($USD Millions)$153.8 $151.8 $158.0
Total Debt ($USD Millions)$297.0 $293.0 $288.6
Inventory ($USD Millions)$128.4 $138.3 $148.5
Store Count (End of Period)657 655 634

Notes:

  • Q4 FY2024 excludes prior-year 53rd week; ex-53rd week, sales increased 1.4% YoY per CFO .
  • SG&A was $73.8M (26.8% of sales) and marketing $15.4M (5.6% of sales) in Q4 FY2024 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD)Q4 FY2024$255–$270M Actual: $275.6M Raised vs guide (beat)
Adjusted EBITDA ($USD)Q4 FY2024$9–$15M Actual: $16.7M Raised vs guide (beat)
Net Sales ($USD)Q1 FY2025—$264–$274M Initiated
Adjusted EBITDA ($USD)Q1 FY2025—$24–$28M Initiated
Net Sales ($USD)FY 2025—$1.080–$1.100B Initiated
Adjusted EBITDA ($USD)FY 2025—$100–$110M Initiated
Capital Expenditures ($USD)FY 2025$20–$25M (FY 2024) $15–$20M Lowered
Store Closures / OpeningsFY 2024 vs FY 2025Close 30–40, open 12–16 (FY 2024) Close 40–50, open 4–8 (FY 2025) More closures, fewer openings
Tariffs AssumptionFY 2025—Includes known tariffs only Clarified

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
Product innovation & sub-brandsAnnounced multiple capsules; denim relaunch; chase capability (10% Q4 receipts) Festy launched Dec; Nightball/Retroshik Jan; strong sell-through, younger customers, higher margins; more launches ahead (Belle Isle, Lovesick, Tru by Torrid, Studio) Strengthening
Store optimizationPlan to rebalance towards outdoor centers; 30–40 closures in FY 2024 Closed 35 in FY 2024; plan 40–50 closures in FY 2025; retention 60–70%; EBITDA uplift expected Accelerating
Marketing & influencersCasting Call success; brand awareness up; acquisition/reactivation positive Front-load marketing in H1; influencer collaborations; richer content; in-store storytelling Front-loaded investment
Supply chain & sourcingChina exposure reduced to mid-teens; diversified sourcing Guidance includes known tariffs; diversified across VN, KH, ID, EG, TR, BD Derisking continues
Macro & consumerQ3 volatility (traffic down in Oct, hurricanes effect); cautious outlook Early Q1 choppy; improving trend line; prudent FY 2025 guide Stabilizing cautiously
Clearance/promo strategyPeak clearance comp headwind in Q2; improving mix Clearance drag moderating; anticipate more promos given macro; margins hedged Moderation with caution

Management Commentary

  • “For the fourth quarter, we exceeded expectations on both the top and bottom line, generating sales of $275.6 million and an adjusted EBITDA of $16.7 million.” — CEO Lisa Harper .
  • “We successfully closed 35 stores in the fiscal year 2024 and are targeting to close an additional 40 to 50 stores in fiscal 2025… average customer retention rate of 60%, rising to nearly 70% in markets with multiple store clusters.” — CEO Lisa Harper .
  • “We ended the quarter with $48.5 million in cash and cash equivalents… Operating cash flow increased by 2x to $77.4 million… we reduced total debt to $288.6 million.” — CFO Paula Dempsey .
  • “Nightball and Retroshik launched with exceptional strength… key items selling out quickly… Paid media performance exceeded expectations… attracting younger customers.” — CEO Lisa Harper .

Q&A Highlights

  • Consumer health and Q1 trends: Traffic improving, conversion cautious; core categories (denim, non-denim bottoms, dresses) strong; strategy broadens aesthetics to drive frequency and share of wallet .
  • Store closures cadence and EBITDA impact: Majority of 40–50 closures in Q4 FY2025 (Jan 31, 2026 lease exits), benefits more visible in FY2026; FY2024 closures benefit FY2025 margins .
  • Retention and formats: 60–70% retention not just year-1; potential to re-enter markets in outdoor centers; testing larger formats aligned with sub-brands .
  • Promotions and clearance: Clearance profitable at expected levels; slight uptick in promo in Q1 due to macro; product margins expected relatively flat YoY .
  • Sub-brands sizing and inventory: Sub-brands ~10% of business/receipts, self-funded by reducing less productive core depth; overall inventory planned relatively flat YoY .
  • Tariffs and macro in guidance: Guidance includes current tariff visibility only; prudently embeds pressured consumer environment without forecasting improvement .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 FY2024 EPS, revenue, and EBITDA was unavailable at time of analysis due to S&P Global daily request limits; as an alternative, we benchmark against company guidance and reported actuals .
  • Given beats vs internal guidance on revenue and adjusted EBITDA, we expect modest positive estimate revisions to FY 2025 EBITDA and margin trajectory; however, promotional cadence and macro prudence may temper top-line revisions .

Key Takeaways for Investors

  • Beat vs guidance with improving regular price trends suggests product refresh and sub-brand strategy is working; watch Q1 execution with front-loaded marketing .
  • Store optimization (40–50 closures, 4–8 openings) should enhance unit economics and EBITDA margins with demonstrated customer retention, though revenue impact largely in FY2026 timing .
  • Sub-brands (~10% of receipts) are margin-accretive and attract younger cohorts, reducing reliance on promotions; scaling success is a medium-term growth lever .
  • Balance sheet flexibility improves strategic optionality: cash $48.5M, liquidity $158.0M, debt trending down; operating cash flow strength supports capex and marketing .
  • Risks: macro uncertainty and promotional intensity could cap near-term margins; guidance prudently embeds known tariffs and cautious consumer .
  • Monitor KPIs: regular price comps, clearance mix, sub-brand sell-through, and store closure retention to validate margin expansion narrative in FY2025–FY2026 .
  • Tactical: Near-term setup favors companies executing product newness with disciplined inventory; any confirmation of Q1 guide on sales/EBITDA could be a stock catalyst given recent operational beats vs guidance .