- Delivered First Quarter Net Sales in line with
guidance
- First Quarter Net Income of $12.2 million
- Exceeded First Quarter Adjusted EBITDA(1) guidance
Torrid Holdings Inc. (“Torrid” or the “Company”) (NYSE: CURV), a
direct-to-consumer apparel, intimates, and accessories brand in
North America for women sizes 10 to 30, today announced its
financial results for the quarter ended May 4, 2024.
Lisa Harper, Chief Executive Officer, stated, “We are pleased
with our start to fiscal 2024. In the first quarter we delivered
higher-than-expected Adjusted EBITDA(1) driven by strong gross
margin expansion, while maintaining our focus on tightly
controlling inventory levels. Our customers responded positively to
our ongoing assortment changes, leading to improved traffic and
sales throughout the quarter.”
Financial Highlights for the First Quarter of Fiscal
2024
- Net sales decreased 4.8% to $279.8 million compared to $293.9
million for the first quarter of last year. Comparable sales(2)
decreased 9% in the first quarter.
- Gross profit margin was 41.3% compared to 37.7% in the first
quarter of last year. The 360-bps improvement was primarily driven
by lower product costs through strategic pricing renegotiations
with our vendors and an increase in sales of regular priced
products.
- Net income of $12.2 million, or $0.12 per share, compared to
net income of $11.8 million, or $0.11 per share in the first
quarter of last year.
- Adjusted EBITDA(1) was $38.2 million, or 13.7% of net sales,
compared to $38.3 million, or 13.0% of net sales, in the first
quarter of last year.
- In the first quarter, we opened six Torrid stores and closed
three Torrid stores. The total store count at quarter end was 658
stores.
First Quarter of Fiscal 2024 Financial and Operating
Metrics
May 4, 2024
April 29, 2023
Number of stores (as of end of period)
658
638
Three Months Ended
(in thousands, except
percentages)
May 4, 2024
April 29, 2023
Comparable sales(A)
(9
)%
(14
)%
Net income
$
12,172
$
11,808
Adjusted EBITDA(B)
$
38,222
$
38,260
(A) Comparable sales(2) for the first
quarter of fiscal year 2024 compares sales for the 13-week period
ended May 4, 2024 with sales for the 13-week period ended May 6,
2023. Comparable sales(2) for the first quarter of fiscal year 2023
compares sales for the 13-week period ended April 29, 2023 with
sales for the 13-week period ended April 30, 2022. (B) Please refer
to “Non-GAAP Reconciliation” below for a reconciliation of net
income to Adjusted EBITDA(1).
Balance Sheet and Cash
Flow
Cash and cash equivalents at the end of the first quarter
of 2024 totaled $20.9 million. Total liquidity at the end of the
quarter, including available borrowing capacity under our revolving
credit agreement, was $137.0 million.
Cash flow from operations for the three-month period
ended May 4, 2024 was $27.6 million, compared to $11.2 million for
the three-month period ended April 29, 2023.
Outlook
For the second quarter of fiscal 2024 the Company
expects:
- Net sales between $280.0 million and $285.0 million.
- Adjusted EBITDA(1) between $30.0 million and $34.0
million.
For the full year fiscal 2024 the Company expects:
- Net sales between $1.135 billion and $1.155 billion.
- Adjusted EBITDA(1) between $109.0 million and $116.0
million.
- Capital expenditures between $20 million and $25 million
reflecting infrastructure and technology investments as well as new
stores for the year.
- We plan on opening 15 to 20 new Torrid stores and closing 10 to
15 stores.
The above outlook is based on several assumptions, including,
but not limited to, the macroeconomic challenges in the industry in
fiscal 2024 as well as higher labor costs. The above outlook does
not take into consideration the recent Consumer Financial
Protection Bureau ruling which mandates, among other things,
decreases in credit card late fees, and could alter the
profitability of our agreements with our private label credit card
financing company. See “Forward-Looking Statements” for additional
information.
Conference Call Details
A conference call to discuss the Company’s first quarter 2024
results is scheduled for June 12, 2024, at 4:30 p.m. ET. Those who
wish to participate in the call may do so by dialing (877) 407-9208
or (201) 493-6784 for international callers. The conference call
will also be webcast live at https://investors.torrid.com. For
those unable to participate, a replay of the conference call will
be available approximately three hours after the conclusion of the
call until June 19, 2024.
Notes
(1)
Adjusted EBITDA is a non-GAAP financial
measure. See “Non-GAAP Financial Measures” and “Non-GAAP
Reconciliation” for additional information on non-GAAP financial
measures and the accompanying table for a reconciliation to the
most comparable GAAP measure. The Company does not provide
reconciliations of the forward-looking non-GAAP measures of
Adjusted EBITDA to the most directly comparable forward-looking
GAAP measure because the timing and amount of excluded items are
unreasonably difficult to fully and accurately estimate. For the
same reasons, the Company is unable to address the probable
significance of the unavailable information, which could be
material to future results.
(2)
Comparable sales for any given period are
defined as the sales of our e-Commerce operations and stores that
we have included in our comparable sales base during that period.
We include a store in our comparable sales base after it has been
open for 15 full fiscal months. If a store is closed during a
fiscal year, it is only included in the computation of comparable
sales for the full fiscal months in which it was open. Comparable
sales for the first quarter of fiscal year 2024 compares sales for
the 13-week period ended May 4, 2024 with sales for the 13-week
period ended May 6, 2023. Comparable sales for the first quarter of
fiscal year 2023 compares sales for the 13-week period ended April
29, 2023 with sales for the 13-week period ended April 30, 2022.
Partial fiscal months are excluded from the computation of
comparable sales. We apply current year foreign currency exchange
rates to both current year and prior year comparable sales to
remove the impact of foreign currency fluctuation and achieve a
consistent basis for comparison. Comparable sales allow us to
evaluate how our unified commerce business is performing exclusive
of the effects of non-comparable sales and new store openings.
About Torrid
TORRID is a direct-to-consumer brand of apparel, intimates and
accessories in North America aimed at fashionable women who are
curvy and wear sizes 10 to 30. TORRID is focused on fit and offers
high quality products across a broad assortment that includes tops,
bottoms, denim, dresses, intimates, activewear, footwear and
accessories.
Non-GAAP Financial Measures
In addition to results determined in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”), management utilizes certain non-GAAP performance
measures, such as Adjusted EBITDA, for purposes of evaluating
ongoing operations and for internal planning and forecasting
purposes. We believe that these non-GAAP operating measures, when
reviewed collectively with our GAAP financial information, provide
useful supplemental information to investors in assessing our
operating performance.
Adjusted EBITDA is a supplemental measure of our operating
performance that is neither required by, nor presented in
accordance with, GAAP and our calculations thereof may not be
comparable to similarly titled measures reported by other
companies. Adjusted EBITDA represents GAAP net income (loss) plus
interest expense less interest income, net of other expense
(income), plus provision for income taxes, depreciation and
amortization (“EBITDA”), and share-based compensation, non-cash
deductions and charges, and other expenses
We believe Adjusted EBITDA facilitates operating performance
comparisons from period to period by isolating the effects of
certain items that vary from period to period without any
correlation to ongoing operating performance. We also use Adjusted
EBITDA as one of the primary methods for planning and forecasting
the overall expected performance of our business and for evaluating
on a quarterly and annual basis, actual results against such
expectations.
Further, we recognize Adjusted EBITDA as a commonly used measure
in determining business value and, as such, use it internally to
report and analyze our results and as a benchmark to determine
certain non-equity incentive payments made to executives.
Adjusted EBITDA has limitations as an analytical tool. This
measure is not a measurement of our financial performance under
GAAP and should not be considered in isolation or as an alternative
to or substitute for net income (loss), income (loss) from
operations, earnings (loss) per share or any other performance
measures determined in accordance with GAAP or as an alternative to
cash flows from operating activities as a measure of our liquidity.
Our presentation of Adjusted EBITDA should not be construed as an
inference that our future results will be unaffected by unusual or
non-recurring items.
Forward-Looking Statements
Certain statements made in this earnings release are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities Act”) and
Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and are subject to the safe harbor created thereby
under the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical or current fact
included in this earnings release are forward-looking statements.
Forward-looking statements reflect our current expectations and
projections relating to our financial condition, results of
operations, plans, objectives, future performance and business. You
can identify forward-looking statements by the fact that they do
not relate strictly to historical or current facts. These
statements may include words such as “anticipate,” “estimate,”
“expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,”
“should,” “can have,” “likely” and other words and terms of similar
meaning (including their negative counterparts or other various or
comparable terminology).
For example, all statements we make relating to our estimated
and projected costs, expenditures, cash flows, growth rates and
financial results, our plans and objectives for future operations,
growth or initiatives, strategies or the expected outcome or impact
of pending or threatened litigation are forward-looking statements.
All forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those that we expected, including:
- the adverse impact of rulemaking changes implemented by the
Consumer Financial Protection Bureau on our income streams,
profitability and results of operations;
- changes in consumer spending and general economic
conditions;
- the negative impact on interest expense as a result of rising
interest rates;
- inflationary pressures with respect to labor and raw materials
and global supply chain constraints that could increase our
expenses;
- our ability to identify and respond to new and changing product
trends, customer preferences and other related factors;
- our dependence on a strong brand image;
- increased competition from other brands and retailers;
- our reliance on third parties to drive traffic to our
website;
- the success of the shopping centers in which our stores are
located;
- our ability to adapt to consumer shopping preferences and
develop and maintain a relevant and reliable omni-channel
experience for our customers;
- our dependence upon independent third parties for the
manufacture of all of our merchandise;
- availability constraints and price volatility in the raw
materials used to manufacture our products;
- interruptions of the flow of our merchandise from international
manufacturers causing disruptions in our supply chain;
- our sourcing a significant amount of our products from
China;
- shortages of inventory, delayed shipments to our e-Commerce
customers and harm to our reputation due to difficulties or
shut-down of our distribution facility;
- our reliance upon independent third-party transportation
providers for substantially all of our product shipments;
- our growth strategy;
- our failure to attract and retain employees that reflect our
brand image, embody our culture and possess the appropriate skill
set;
- damage to our reputation arising from our use of social media,
email and text messages;
- our reliance on third-parties for the provision of certain
services, including real estate management;
- our dependence upon key members of our executive management
team;
- our reliance on information systems;
- system security risk issues that could disrupt our internal
operations or information technology services;
- unauthorized disclosure of sensitive or confidential
information, whether through a breach of our computer system,
third-party computer systems we rely on, or otherwise;
- our failure to comply with federal and state laws and
regulations and industry standards relating to privacy, data
protection, advertising and consumer protection;
- payment-related risks that could increase our operating costs
or subject us to potential liability;
- claims made against us resulting in litigation;
- changes in laws and regulations applicable to our
business;
- regulatory actions or recalls arising from issues with product
safety;
- our inability to protect our trademarks or other intellectual
property rights;
- our substantial indebtedness and lease obligations;
- restrictions imposed by our indebtedness on our current and
future operations;
- changes in tax laws or regulations or in our operations that
may impact our effective tax rate;
- the possibility that we may recognize impairments of long-lived
assets;
- our failure to maintain adequate internal control over
financial reporting; and
- the threat of war, terrorism or other catastrophes that could
negatively impact our business.
The outcome of the events described in any of our
forward-looking statements are also subject to risks, uncertainties
and other factors described in the sections entitled "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in our Annual Report on Form 10-K filed
with the Securities and Exchange Commission ("SEC") on April 2,
2024 and in our other filings with the SEC and public
communications. You should evaluate all forward-looking statements
made in this earnings release in the context of these risks and
uncertainties.
We caution you that the important factors referenced above may
not include all of the factors that are important to you. In
addition, we cannot assure you that we will realize the results or
developments we expect or anticipate or, even if substantially
realized, that they will result in the outcomes or affect us or our
operations in the way we expect. The forward-looking statements
included in this earnings release are made only as of the date
hereof. We undertake no obligation to publicly update or revise any
forward-looking statement as a result of new information, future
events or otherwise except to the extent required by law. Our
forward-looking statements do not reflect the potential impact of
any future acquisitions, mergers, dispositions, joint ventures or
investments.
Investors and others should note that we may announce material
information to our investors using our investor relations website
(https://investors.torrid.com), SEC filings, press releases, public
conference calls and webcasts. We use these channels, as well as
social media, to communicate with our investors and the public
about our company, our business and other issues. It is possible
that the information that we post on social media could be deemed
to be material information. We therefore encourage investors to
visit these websites from time to time. The information contained
on such websites and social media posts is not incorporated by
reference into this filing. Further, our references to website URLs
in this filing are intended to be inactive textual references
only.
TORRID HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
AND COMPREHENSIVE
INCOME
(UNAUDITED)
(In thousands, except per
share data)
Three Months Ended
May 4, 2024
April 29, 2023
Net sales
$
279,771
$
293,854
Cost of goods sold
164,350
183,212
Gross profit
115,421
110,642
Selling, general and administrative
expenses
76,466
71,228
Marketing expenses
12,812
13,351
Income from operations
26,143
26,063
Interest expense
9,377
9,468
Other expense, net of other income
110
60
Income before provision for income
taxes
16,656
16,535
Provision for income taxes
4,484
4,727
Net income
$
12,172
$
11,808
Comprehensive income:
Net income
$
12,172
$
11,808
Other comprehensive loss:
Foreign currency translation
adjustment
(89
)
(170
)
Total other comprehensive loss
(89
)
(170
)
Comprehensive income
$
12,083
$
11,638
Net earnings per share:
Basic
$
0.12
$
0.11
Diluted
$
0.12
$
0.11
Weighted average number of
shares:
Basic
104,268
103,800
Diluted
105,247
104,027
TORRID HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(In thousands, except share
data)
May 4, 2024
February 3, 2024
Assets
Current assets:
Cash and cash equivalents
$
20,465
$
11,735
Restricted cash
399
399
Inventory
144,808
142,199
Prepaid expenses and other current
assets
27,032
22,229
Prepaid income taxes
1,592
2,561
Total current assets
194,296
179,123
Property and equipment, net
98,455
103,516
Operating lease right-of-use assets
153,931
162,444
Deposits and other noncurrent assets
15,915
14,783
Deferred tax assets
8,681
8,681
Intangible asset
8,400
8,400
Total assets
$
479,678
$
476,947
Liabilities and stockholders'
deficit
Current liabilities:
Accounts payable
$
58,850
$
46,183
Accrued and other current liabilities
108,764
107,750
Operating lease liabilities
36,050
42,760
Borrowings under credit facility
—
7,270
Current portion of term loan
16,144
16,144
Due to related parties
8,519
9,329
Income taxes payable
5,996
2,671
Total current liabilities
234,323
232,107
Noncurrent operating lease liabilities
147,730
155,825
Term loan
284,517
288,553
Deferred compensation
5,259
5,474
Other noncurrent liabilities
6,489
6,705
Total liabilities
678,318
688,664
Commitments and contingencies
Stockholders' deficit
Preferred shares: $0.01 par value;
5,000,000 shares authorized; no shares issued and outstanding at
May 4, 2024 and February 3, 2024
—
—
Common shares: $0.01 par value;
1,000,000,000 shares authorized; 104,345,896 shares issued and
outstanding at May 4, 2024; 104,204,554 shares issued and
outstanding at February 3, 2024
1,044
1,043
Additional paid-in capital
136,133
135,140
Accumulated deficit
(335,415
)
(347,587
)
Accumulated other comprehensive loss
(402
)
(313
)
Total stockholders' deficit
(198,640
)
(211,717
)
Total liabilities and stockholders'
deficit
$
479,678
$
476,947
TORRID HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED) (In
thousands)
Three Months Ended May 4,
2024
Three Months Ended April 29,
2023
OPERATING ACTIVITIES
Net income
$
12,172
$
11,808
Adjustments to reconcile net income to net
cash provided by operating activities:
Write down of inventory
685
732
Operating right-of-use assets
amortization
10,169
9,982
Depreciation and other amortization
9,639
9,617
Share-based compensation
1,658
2,488
Other
(590
)
(742
)
Changes in operating assets and
liabilities:
Inventory
(3,431
)
4,402
Prepaid expenses and other current
assets
(4,803
)
(1,827
)
Prepaid income taxes
969
231
Deposits and other noncurrent assets
(1,176
)
(1,057
)
Accounts payable
12,911
1,458
Accrued and other current liabilities
3,126
(16,667
)
Operating lease liabilities
(15,840
)
(10,052
)
Other noncurrent liabilities
(165
)
(170
)
Deferred compensation
(215
)
295
Due to related parties
(810
)
(2,957
)
Income taxes payable
3,325
3,682
Net cash provided by operating
activities
27,624
11,223
INVESTING ACTIVITIES
Purchases of property and equipment
(7,008
)
(5,660
)
Net cash used in investing activities
(7,008
)
(5,660
)
FINANCING ACTIVITIES
Proceeds from revolving credit
facility
62,780
197,020
Principal payments on revolving credit
facility
(70,050
)
(193,450
)
Principal payments on term loan
(4,375
)
(4,375
)
Proceeds from issuances under share-based
compensation plans
86
129
Withholding tax payments related to
vesting of restricted stock units and awards
(300
)
(124
)
Net cash used in financing activities
(11,859
)
(800
)
Effect of foreign currency exchange rate
changes on cash, cash equivalents and restricted cash
(27
)
(72
)
Increase in cash, cash equivalents and
restricted cash
8,730
4,691
Cash, cash equivalents and restricted cash
at beginning of period
12,134
13,935
Cash, cash equivalents and restricted cash
at end of period
$
20,864
$
18,626
SUPPLEMENTAL INFORMATION
Cash paid during the period for interest
related to the revolving credit facility and term loan
$
9,709
$
9,065
Cash paid during the period for income
taxes
$
201
$
834
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Property and equipment purchases included
in accounts payable and accrued liabilities
$
1,927
$
2,241
Non-GAAP
Reconciliation
The following table provides a
reconciliation of Net income to Adjusted EBITDA for the periods
presented (dollars in thousands):
Three Months Ended
May 4, 2024
April 29, 2023
Net income
$
12,172
$
11,808
Interest expense
9,377
9,468
Other expense, net of other income
110
60
Provision for income taxes
4,484
4,727
Depreciation and amortization(A)
9,259
9,238
Share-based compensation(B)
1,658
2,488
Non-cash deductions and charges(C)
(58
)
43
Other expenses(D)
1,225
428
Adjusted EBITDA
$
38,227
$
38,260
____________________
(A) Depreciation and amortization excludes
amortization of debt issuance costs and original issue discount
that are reflected in interest expense. (B) During the three months
ended May 4, 2024 and April 29, 2023, share-based compensation
includes $0.4 million and $0.1 million, respectively, for awards
that will be settled in cash as they are accounted for as
share-based compensation in accordance with ASC 718,
Compensation—Stock Compensation, similar to awards settled in
shares. (C) Noncash deductions and charges includes non-cash losses
on property and equipment disposals and the net impact of non-cash
rent expense. (D) Other expenses include severance costs for
certain key management positions and certain litigation fees, and
the reimbursement of certain management expenses, primarily for
travel, incurred by Sycamore on our behalf, which are not
considered to be part of our core business.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240612649585/en/
Investors ICR Inc. Lyn Walther IR@torrid.com
Media Joele Frank, Wilkinson Brimmer Katcher Michael
Freitag / Arielle Rothstein / Lyle Weston Media@torrid.com
Torrid (NYSE:CURV)
Gráfico Histórico do Ativo
De Jan 2025 até Fev 2025
Torrid (NYSE:CURV)
Gráfico Histórico do Ativo
De Fev 2024 até Fev 2025