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.
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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.
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