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.
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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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