Core Viewpoint - Torrid Holdings (CURV) has experienced a significant downtrend, with a 27% decline in stock price over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with readings below 30 indicating oversold conditions [2]. - CURV's current RSI reading is 28.87, suggesting that the heavy selling pressure may be exhausting, indicating a possible bounce back towards previous supply and demand equilibrium [5]. Group 2: Fundamental Analysis - Analysts have shown strong consensus in raising CURV's earnings estimates, with a 5.9% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [7]. - CURV holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8].

Core Viewpoint - Torrid Holdings (CURV) has experienced a significant downtrend, with a 28.2% decline in stock price over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with readings below 30 indicating oversold conditions [2]. - CURV's current RSI reading is 24.67, indicating that the heavy selling pressure may be exhausting itself, which could lead to a reversal in the stock's trend [5]. Group 2: Fundamental Analysis - Analysts have raised their earnings estimates for CURV by 5.9% over the last 30 days, suggesting a positive outlook for the company's earnings, which typically correlates with price appreciation [7]. - CURV holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8].

Market Overview - U.S. stocks showed mixed performance with the Dow Jones index falling approximately 0.2% to 43,011.70, while the NASDAQ rose by 0.20% to 19,953.27 and the S&P 500 increased by 0.02% to 6,093.14 [1] - Information technology shares experienced a notable increase of 0.8%, while real estate stocks declined by 1.3% [1] Commodities - Crude oil prices rose by 2.5% to $65.99, gold increased by 0.3% to $3,343.80, silver was up 1% to $36.070, and copper rose by 0.7% to $4.9605 [5] European Markets - European shares were generally lower, with the eurozone's STOXX 600 falling by 0.74%, Spain's IBEX 35 Index down 1.59%, London's FTSE 100 down 0.46%, Germany's DAX 40 down 0.61%, and France's CAC 40 slipping by 0.76% [6] Asian Markets - Asian markets closed higher, with Japan's Nikkei gaining 0.39%, Hong Kong's Hang Seng Index up 1.23%, China's Shanghai Composite rising 1.04%, and India's BSE Sensex increasing by 0.85% [7] Company News - Plus Therapeutics, Inc. saw its shares surge by 59% to $0.2968 following FDA clearance for its investigational new drug application for REYOBIQ [9] - QuantumScape Corporation's shares rose by 36% to $5.88 after achieving a key milestone in integrating its advanced Cobra separator process [9] - SeaStar Medical Holding Corporation's shares increased by 49% to $0.5362 due to strategic actions for Nasdaq compliance [9] - Lifeward Ltd. experienced a drop of 38% to $0.6015 after announcing a public offering of 4 million shares at $0.65 per share [9] - Torrid Holdings Inc. shares fell by 37% to $3.1900 following the pricing of a secondary offering of 10 million shares at $3.50 per share [9] - Allot Ltd. shares decreased by 17% to $8.01 after announcing a public offering of 5 million shares at $8.00 per share [9] Economic Indicators - Sales of new single-family homes in the U.S. decreased by 13.7% to an annualized rate of 623,000 units in May [11] - U.S. building permits fell by 2% to an annualized rate of 1.394 million in May [11] - The volume of mortgage applications in the U.S. increased by 1.1% from the previous week [11] - U.S. crude oil inventories declined by 5.836 million barrels, significantly exceeding market estimates of a 0.75 million barrel decrease [11]

[PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited Q1 2025 financial statements show decreased net sales and net income, with negative operating cash flow [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$451.4 million** due to lower cash, while total liabilities fell and stockholders' deficit improved Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 | February 1, 2025 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $23,693 | $48,523 | ($24,830) | | Inventory | $149,570 | $148,493 | $1,077 | | **Total Assets** | **$451,378** | **$488,441** | **($37,063)** | | Total current liabilities | $232,008 | $263,132 | ($31,124) | | Noncurrent debt, net | $268,373 | $272,409 | ($4,036) | | **Total Liabilities** | **$635,199** | **$679,530** | **($44,331)** | | **Total stockholders' deficit** | **($183,821)** | **($191,089)** | **$7,268** | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q1 2025 net sales decreased **4.9%** to **$266.0 million**, resulting in a **51.2%** drop in net income to **$5.9 million** Q1 2025 vs. Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 (ended May 3) | Q1 2024 (ended May 4) | YoY Change | | :--- | :--- | :--- | :--- | | Net sales | $265,965 | $279,771 | -4.9% | | Gross profit | $101,402 | $115,421 | -12.1% | | Income from operations | $16,027 | $26,143 | -38.7% | | **Net income** | **$5,940** | **$12,172** | **-51.2%** | | **Diluted EPS** | **$0.06** | **$0.12** | **-50.0%** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 operating activities used **$18.0 million** cash, a significant shift from prior year's positive flow, mainly due to working capital changes Cash Flow Summary (in thousands) | Activity | Q1 2025 (ended May 3) | Q1 2024 (ended May 4) | Change | | :--- | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($18,015) | $27,624 | ($45,639) | | Net cash used in investing activities | ($2,547) | ($7,008) | $4,461 | | Net cash used in financing activities | ($4,674) | ($11,859) | $7,185 | | **(Decrease) increase in cash** | **($24,830)** | **$8,730** | **($33,560)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail revenue by product, debt structure including **$288.75 million** outstanding, and **$4.0 million** accrued for a class action settlement - Apparel sales constitute the vast majority of revenue, totaling **$239.8 million** in Q1 2025, down from **$252.6 million** in Q1 2024[42](index=42&type=chunk) - As of May 3, 2025, total debt outstanding under the Amended Term Loan Credit Agreement was **$288.75 million**, with an interest rate of approximately **10%**. Availability under the ABL Facility was **$117.3 million**[58](index=58&type=chunk)[60](index=60&type=chunk)[62](index=62&type=chunk) - The company has accrued a **$4.0 million** estimated loss for a proposed settlement in a class action lawsuit regarding pricing and sales practices. Two other class action lawsuits are pending, one related to a data breach and another concerning website terms and pricing practices, for which potential losses are not yet determinable[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 net sales decreased **4.9%** due to lower transactions, gross profit margin contracted to **38.1%**, and Adjusted EBITDA declined to **$27.1 million** [Key Financial and Operating Metrics](index=20&type=section&id=Key%20Financial%20and%20Operating%20Metrics) Comparable sales declined **4%** in Q1 2025, an improvement from prior year, while Adjusted EBITDA fell to **$27.1 million** and store count decreased to **632** Key Metrics Comparison | Metric | Q1 2025 (ended May 3) | Q1 2024 (ended May 4) | | :--- | :--- | :--- | | Number of stores | 632 | 658 | | Comparable sales | (4)% | (9)% | | Net income (in thousands) | $5,940 | $12,172 | | Adjusted EBITDA (in thousands) | $27,128 | $38,227 | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2025 saw net sales fall **4.9%**, gross profit decrease **12.1%**, and income from operations drop **38.7%**, despite an **8.4%** decrease in SG&A - Net sales decreased by **$13.8 million (4.9%)** primarily due to decreases in sales transactions and transaction values. The total store count also decreased by **26 stores** year-over-year[109](index=109&type=chunk) - Gross profit margin decreased by **3.2 percentage points** to **38.1%**, driven by the decrease in net sales and an increase in merchandising payroll costs[110](index=110&type=chunk) - SG&A expenses decreased by **$6.5 million (8.4%)**, mainly from lower payroll, bonus, and store operating costs[111](index=111&type=chunk) - Marketing expenses increased by **$2.5 million (19.9%)** due to higher spending on social media, retargeting, and photographic production[112](index=112&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity relies on cash from operations and its ABL Facility, with **$23.7 million** cash and **$117.3 million** available credit as of May 3, 2025 - As of May 3, 2025, the company had **$23.7 million** in cash and cash equivalents[117](index=117&type=chunk) - The company has access to an additional **$117.3 million** in liquidity from its ABL Facility, net of outstanding letters of credit[117](index=117&type=chunk) - Primary cash needs include merchandise inventories, payroll, rent, capital expenditures, and debt service payments[124](index=124&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk profile has not materially changed from its prior fiscal year 2024 Annual Report on Form 10-K - There have been no material changes to the company's market risk profile as of May 3, 2025[135](index=135&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including CEO and CFO, concluded disclosure controls were effective as of May 3, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the quarter[137](index=137&type=chunk) - No changes occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[138](index=138&type=chunk) [PART II — OTHER INFORMATION](index=29&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not party to any legal proceedings expected to have a material adverse effect on its business - The company is subject to legal proceedings in the ordinary course of business but does not believe any will have a material adverse effect[141](index=141&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2024 Form 10-K - No material changes to the risk factors disclosed in the 2024 Form 10-K have occurred[142](index=142&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[143](index=143&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2025 - During the fiscal quarter ended May 3, 2025, no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[147](index=147&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Interactive Data Files (Inline XBRL)

Group 1 - The article emphasizes a long-only investment strategy that evaluates companies from an operational and buy-and-hold perspective, focusing on long-term earnings power and competitive dynamics rather than market-driven price actions [1] - Quipus Capital's approach suggests that most investment calls will be holds, indicating a cautious stance in a bullish market, with only a small fraction of companies deemed suitable for buying at any given time [1] - The hold articles are intended to provide valuable information for future investors and introduce a healthy skepticism towards the prevailing market optimism [1] Group 2 - The article does not disclose any stock, option, or derivative positions in the mentioned companies, nor does it plan to initiate any such positions in the near future [2] - The opinions expressed in the article are solely those of the author and are not influenced by any business relationships with the companies discussed [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the overall stance of the platform [3]

Group 1 - Torrid Holdings (NYSE: CURV) is undergoing a significant transition as a direct-to-consumer retailer focused on clothing and accessories for 'curvy women' [1] - The company is positioned within a niche market that caters specifically to a demographic often underserved in the fashion industry [1] Group 2 - The investment service provided by Crude Value Insights emphasizes cash flow and the potential for value and growth in oil and natural gas companies [2] - Subscribers have access to a comprehensive stock model account and in-depth cash flow analyses of exploration and production firms [2] - The service includes live chat discussions about the sector, enhancing community engagement and information sharing [2]

Core Viewpoint - Torrid Holdings reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, but down from $0.12 per share a year ago, indicating a 20% earnings surprise [1][2] Financial Performance - The company posted revenues of $265.97 million for the quarter ended April 2025, missing the Zacks Consensus Estimate by 1.36% and down from $279.77 million year-over-year [2] - Over the last four quarters, Torrid Holdings has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Torrid Holdings shares have declined approximately 2.7% since the beginning of the year, while the S&P 500 has gained 1.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $279.17 million, and for the current fiscal year, it is $0.15 on revenues of $1.09 billion [7] Industry Outlook - The Retail - Apparel and Shoes industry, to which Torrid Holdings belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5][6]

Financial Data and Key Metrics Changes - The company reported net sales of $266 million for Q1, down from $279.8 million in the prior year, with comparable store sales declining by 3.5% [20][24] - Gross profit decreased to $101.4 million from $115.4 million, with gross margin declining by 320 basis points to 38.1% due to planned promotional initiatives [24][25] - Adjusted EBITDA was $27.1 million, representing a 10.2% margin, down from $38.2 million and 13.7% in the previous year [27] - Net income for the quarter was $5.9 million, or $0.06 per share, compared to $12.2 million, or $0.12 per share, in the prior year [26] Business Line Data and Key Metrics Changes - The performance of sub-brands such as Festi, Belle Isle, Nightfall, and Retro Chic exceeded expectations, achieving sales 2 to 6 times higher than planned [7] - Online sales demand is approaching 70% of total sales, with expectations to reach 75% by 2026 [9] - The company plans to increase the delivery frequency of existing sub-brands from 6-8 times a year to 12 times annually, aiming for sub-brands to represent up to 30% of the portfolio by 2026 [8] Market Data and Key Metrics Changes - The company closed 35 stores in 2024 and plans to close approximately 180 stores in 2025, with 60 stores targeted for closure in the first half of the year [10][29] - The closures are expected to have a negligible impact on net sales, as the company retains approximately 60% of customers post-closure [10][29] Company Strategy and Development Direction - The company is focusing on enhancing product assortment, driving customer growth, and executing a store optimization plan [6] - A strategic shift towards online sales is evident, with plans to optimize the retail footprint to align with customer preferences for online shopping [12][60] - The company is diversifying sourcing to reduce exposure to China, with current exposure in the low single digits [13] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior remains price and value-conscious, but there is a positive response to new product offerings [20] - The company expects to mitigate approximately $20 million of tariff impact through expense reductions and strategic marketing investments [32] - The outlook for fiscal 2025 includes a revenue impact of approximately $40 million to $45 million due to the pause in the footwear business [31] Other Important Information - The company ended the quarter with $23.7 million in cash and access to $117.3 million in additional liquidity [21] - Inventory totaled $149.6 million, a 3.3% increase year-over-year, with expectations for a decrease in year-end comparable store inventory [28] Q&A Session Summary Question: Could you talk about the cadence of newness for the second half? - The company plans to launch a new sub-brand, Lovesick, in August and Studio Luxe in September, with existing brands being delivered monthly by the end of the year [38] Question: What trends are being seen with new customers following their initial sub-brand purchase? - Positive movement in customer acquisition and reactivation has been observed, with a high attachment rate of 90% for sub-brand purchasers adding core products to their baskets [42][44] Question: What is the reason for the sizable sales growth deceleration in Q2? - The pause in the shoe business, primarily sourced from China, is expected to impact sales by $40 million to $45 million for the year [48][49] Question: How does the promotional strategy coexist with new product launches? - The company will continue its typical promotional cadence, responding to consumer value orientation with promotional events [56] Question: What is behind the acceleration in store closures? - The preference for online shopping has led to a decision to close underperforming stores while reallocating resources to digital investments [60][61]

Financial Data and Key Metrics Changes - The company reported net sales of $266 million for Q1, down from $279.8 million in the prior year, with comparable store sales declining by 3.5% [20][24] - Gross profit decreased to $101.4 million from $115.4 million, with gross margin declining by 320 basis points to 38.1% due to planned promotional initiatives [25][26] - Adjusted EBITDA was $27.1 million, representing a 10.2% margin, compared to $38.2 million and 13.7% in the previous year [28] - Net income for the quarter was $5.9 million, or $0.06 per share, down from $12.2 million, or $0.12 per share, in the prior year [27] Business Line Data and Key Metrics Changes - The performance of sub-brands such as Festi, Belle Isle, Nightfall, and Retro Chic exceeded expectations, achieving sales 2 to 6 times higher than planned [6] - Online sales demand is approaching 70% of total sales, with expectations to reach 75% by 2026 [9] - The company plans to increase the delivery frequency of existing sub-brands from 6-8 times a year to 12 times annually, aiming for sub-brands to represent up to 30% of the portfolio by 2026 [7] Market Data and Key Metrics Changes - The company closed 35 stores in 2024 and plans to close approximately 180 stores in 2025, with 60 closures targeted in the first half of the year [10][30] - The closures are expected to have a negligible impact on net sales, as the company retains about 60% of customers post-closure [11][30] Company Strategy and Development Direction - The company is focusing on enhancing product assortment, driving customer growth, and executing a store optimization plan [5] - A strategic shift towards online sales is evident, with plans to optimize the retail footprint to better align with customer demand [12][36] - The company is diversifying sourcing to reduce exposure to China, with current exposure in the low single digits [13] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior remains price and value-conscious, but there is a positive response to new product offerings [20] - The company expects to mitigate approximately $20 million of tariff impact through expense reductions and strategic marketing investments [31] - The outlook for fiscal 2025 includes net sales guidance of $1.03 billion to $1.055 billion, reflecting the pause in the footwear business [31] Other Important Information - The company ended the quarter with $23.7 million in cash and access to $117.3 million in additional liquidity [21] - Inventory totaled $149.6 million, a 3.3% increase year-over-year, with expectations for a decrease in comparable store inventory by mid to high single digits by year-end [29] Q&A Session Summary Question: Can you discuss the cadence of new product launches for the second half? - The company plans to launch a new sub-brand, Lovesick, in August and Studio Luxe in September, with existing brands launching monthly by year-end [40] Question: What trends are seen with new customers following their initial sub-brand purchase? - Positive movement in customer acquisition and reactivation is noted, with a high attachment rate of 90% for core products purchased alongside sub-brands [44][46] Question: Why is there a sizable sales growth deceleration expected in Q2? - The pause in the shoe business, primarily sourced from China, is expected to impact sales by approximately $40 million to $45 million for the year [50][51] Question: How does the promotional strategy coexist with new product launches? - The company will maintain a promotional cadence, responding to consumer value orientation while continuing to drive newness through product launches [58] Question: What is the rationale behind the acceleration of store closures? - The shift towards online shopping preferences among customers necessitates the closure of underperforming stores, allowing for resource reallocation to digital investments [62]

Torrid First Quarter 2025 Financial Results [Performance Overview](index=1&type=section&id=Performance%20Overview) Torrid's Q1 2025 results met expectations, driven by successful sub-brand strategy, accelerated digital transformation, and planned store optimization - The sub-brand strategy is delivering positive results, exceeding expectations and is anticipated to represent nearly **one-third of the business by 2026**[3](index=3&type=chunk) - The company is accelerating its transformation to a more digitally-led business, as the digital channel now accounts for almost **70% of total demand**[3](index=3&type=chunk) - Torrid plans to close up to **180 underperforming stores** in the current year to reduce fixed costs and reinvest in long-term growth areas[3](index=3&type=chunk) - The company leverages a strong customer connection, with **95% of its customers** engaged in its loyalty program[3](index=3&type=chunk) [Financial Highlights for the First Quarter of Fiscal 2025](index=1&type=section&id=Financial%20Highlights%20for%20the%20First%20Quarter%20of%20Fiscal%202025) Torrid's Q1 2025 saw net sales decline by 4.9% to $266.0 million, with significant drops in net income and Adjusted EBITDA Q1 2025 vs Q1 2024 Key Metrics | Metric | Q1 2025 (Three Months Ended May 3, 2025) | Q1 2024 (Three Months Ended May 4, 2024) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $266.0 million | $279.8 million | -4.9% | | Comparable Sales | -3.5% | -9.0% | N/A | | Gross Profit Margin | 38.1% | 41.3% | -320 bps | | Net Income | $5.9 million | $12.2 million | -51.4% | | Diluted EPS | $0.06 | $0.12 | -50.0% | | Adjusted EBITDA | $27.1 million | $38.2 million | -29.0% | | Store Count (End of Period) | 632 | 658 | -26 stores | [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) Q1 2025 ended with $23.7 million in cash and $141.0 million in liquidity, with operating activities shifting to a net cash usage of $18.0 million - Cash and cash equivalents totaled **$23.7 million** at the end of the first quarter[9](index=9&type=chunk) - Total liquidity, including available borrowing capacity, was **$141.0 million**[9](index=9&type=chunk) - Net cash used in operating activities was **$18.0 million**, a reversal from the **$27.6 million** provided by operating activities in the prior year's first quarter[9](index=9&type=chunk) [Fiscal 2025 Outlook](index=2&type=section&id=Outlook) Torrid updated its FY2025 guidance, projecting net sales of $1.030-1.055 billion and Adjusted EBITDA of $95-105 million, alongside strategic store closures and tariff mitigation Q2 Fiscal 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Net Sales | $250 million to $265 million | | Adjusted EBITDA | $18 million to $24 million | Full Year Fiscal 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Net Sales | $1.030 billion to $1.055 billion | | Adjusted EBITDA | $95 million to $105 million | | Capital Expenditures | $10 million to $15 million | - The company plans to close up to **180 stores** to better align with current demand and sales channels[14](index=14&type=chunk) - A net tariff impact of **$20 million** is expected, which will be fully offset by discretionary cost reductions and other optimizations[14](index=14&type=chunk) - A pause in the China-sourced shoe category is projected to reduce 2025 revenue by **$40 million to $45 million** with a neutral EBITDA impact[14](index=14&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section provides unaudited condensed consolidated financial statements for Q1 2025, detailing comprehensive income, balance sheets, and cash flows [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) Q1 2025 net sales decreased to $266.0 million, resulting in a gross profit of $101.4 million and net income of $5.9 million, or $0.06 per diluted share Condensed Consolidated Statements of Comprehensive Income (Unaudited, In thousands) | | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | **Net sales** | **$265,965** | **$279,771** | | Cost of goods sold | 164,563 | 164,350 | | **Gross profit** | **101,402** | **115,421** | | Selling, general and administrative expenses | 70,016 | 76,466 | | Marketing expenses | 15,359 | 12,812 | | **Income from operations** | **16,027** | **26,143** | | Interest expense | 8,161 | 9,377 | | Income before provision for income taxes | 8,572 | 16,656 | | Provision for income taxes | 2,632 | 4,484 | | **Net income** | **$5,940** | **$12,172** | | **Diluted Net earnings per share** | **$0.06** | **$0.12** | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of May 3, 2025, total assets were $451.4 million, with cash at $23.7 million, and total liabilities decreased to $635.2 million Condensed Consolidated Balance Sheets (Unaudited, In thousands) | | May 3, 2025 | February 1, 2025 | | :--- | :--- | :--- | | **Total current assets** | **$202,391** | **$226,166** | | Cash and cash equivalents | $23,693 | $48,523 | | Inventory | $149,570 | $148,493 | | **Total assets** | **$451,378** | **$488,441** | | **Total current liabilities** | **$232,008** | **$263,132** | | **Total liabilities** | **$635,199** | **$679,530** | | **Total stockholders' deficit** | **$(183,821)** | **$(191,089)** | | **Total liabilities and stockholders' deficit** | **$451,378** | **$488,441** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q1 2025 saw net cash used in operating activities of $18.0 million, with total cash and equivalents decreasing by $24.8 million Condensed Consolidated Statements of Cash Flows (Unaudited, In thousands) | | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net income | $5,940 | $12,172 | | **Net cash (used in) provided by operating activities** | **$(18,015)** | **$27,624** | | **Net cash used in investing activities** | **$(2,547)** | **$(7,008)** | | **Net cash used in financing activities** | **$(4,674)** | **$(11,859)** | | (Decrease) increase in cash, cash equivalents and restricted cash | $(24,830) | $8,730 | | Cash, cash equivalents and restricted cash at beginning of period | $48,922 | $12,134 | | **Cash, cash equivalents and restricted cash at end of period** | **$24,092** | **$20,864** | [Non-GAAP Reconciliation](index=10&type=section&id=Non-GAAP%20Reconciliation) This section reconciles GAAP Net Income to Adjusted EBITDA, showing Q1 2025 Adjusted EBITDA of $27.1 million from a Net Income of $5.9 million Reconciliation of Net Income to Adjusted EBITDA (In thousands) | | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | **Net income** | **$5,940** | **$12,172** | | Interest expense | 8,161 | 9,377 | | Interest income, net of other (income) expense | (706) | 110 | | Provision for income taxes | 2,632 | 4,484 | | Depreciation and amortization | 9,394 | 9,259 | | Share-based compensation | 1,469 | 1,658 | | Noncash deductions and charges | 52 | (58) | | Other expenses | 186 | 1,225 | | **Adjusted EBITDA** | **$27,128** | **$38,227** |