Torrid Holdings Inc. (NYSE: CURV) experienced a sharp decline in its stock price during premarket trading on Wednesday after reporting underwhelming third-quarter results and issuing disappointing fourth-quarter guidance.
Q3 Financial Highlights: Net Sales: $263.8 million, a 4.2% year-over-year decline, missing the consensus estimate of $285.8 million. Comparable Sales: Dropped by 6.5% during the quarter. Gross Profit Margin: Improved to 36.1%, up from 33.2% last year, driven by reduced product costs and increased sales of regular-priced items. Earnings Per Share (EPS): $(0.01), below Wall Street’s expectation of $0.03. Cash and Cash Equivalents: $44.0 million at the end of Q3 2024. CEO Commentary Lisa Harper, CEO of Torrid Holdings, acknowledged the challenging business environment, saying, “While we are encouraged by our customers’ response to the newness in our assortments, we are taking a prudent approach to our fourth-quarter outlook given the volatility we have seen in our business.” Harper remains optimistic about fiscal 2025, highlighting strategic changes aimed at fostering growth. Guidance Overview Q4 2024 Net Sales: Projected between $255 million and $270 million, falling short of analysts’ expectations of $290.63 million. Adjusted EBITDA: Estimated at $9.0 million to $15.0 million. FY24 Revenue Outlook: Revised to $1.083 billion – $1.098 billion, down from the prior range of $1.135 billion – $1.145 billion. Market Reaction Following these announcements, CURV shares plummeted by 23.6%, trading at $3.50 in premarket activity. Looking Ahead Despite the short-term challenges, Torrid’s leadership remains confident about its long-term strategies. With adjustments in place for fiscal 2025, the company aims to regain momentum and position itself for sustained growth.Torrid Holdings Inc. Faces Market Setback Following Q3 Miss and Lowered Guidance
