Torrid (CURV) - 2025 Q1 - Quarterly Report

Part I Financial Statements (unaudited) This section presents Torrid Holdings Inc.'s unaudited condensed consolidated financial statements for the quarter ended May 4, 2024 Condensed Consolidated Balance Sheets Total assets were $479,678 thousand, liabilities decreased, reducing stockholders' deficit to $(198,640) thousand as of May 4, 2024 Condensed Consolidated Balance Sheets | Account | May 4, 2024 (in thousands) | February 3, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $194,296 | $179,123 | | Total Assets | $479,678 | $476,947 | | Total Current Liabilities | $234,323 | $232,107 | | Total Liabilities | $678,318 | $688,664 | | Total Stockholders' Deficit | $(198,640) | $(211,717) | Condensed Consolidated Statements of Operations and Comprehensive Income Q1 2024 net sales decreased to $279,771 thousand, while gross profit increased to $115,421 thousand, and net income rose to $12,172 thousand Condensed Consolidated Statements of Operations and Comprehensive Income | Metric | Three Months Ended May 4, 2024 (in thousands) | Three Months Ended April 29, 2023 (in thousands) | | :--- | :--- | :--- | | Net sales | $279,771 | $293,854 | | Gross profit | $115,421 | $110,642 | | Income from operations | $26,143 | $26,063 | | Net income | $12,172 | $11,808 | | Diluted EPS | $0.12 | $0.11 | Condensed Consolidated Statements of Stockholders' Deficit Stockholders' deficit improved from $(211,717) thousand to $(198,640) thousand in Q1 2024, driven by $12,172 thousand net income - The total stockholders' deficit improved from $(211,717) thousand to $(198,640) thousand in the first quarter of 2024, mainly due to net income of $12,172 thousand[22] Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly increased to $27,624 thousand in Q1 2024, leading to an $8,730 thousand net increase in cash Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended May 4, 2024 (in thousands) | Three Months Ended April 29, 2023 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $27,624 | $11,223 | | Net cash used in investing activities | $(7,008) | $(5,660) | | Net cash used in financing activities | $(11,859) | $(800) | | Increase in cash, cash equivalents and restricted cash | $8,730 | $4,691 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail accounting policies, revenue disaggregation, related-party transactions, and $300,700 thousand in outstanding term loans - The company operates as a single reportable segment, combining its e-Commerce and physical store operations[32] Revenue Disaggregation | Revenue Category | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Apparel | $252,630 | $258,913 | | Non-apparel | $20,286 | $26,848 | | Other | $6,855 | $8,093 | | Total net sales | $279,771 | $293,854 | - The company purchased $12,000 thousand in merchandise from MGF Sourcing US, LLC, a related party controlled by affiliates of Sycamore, during the first quarter of 2024[63] - As of May 4, 2024, total borrowings of $300,700 thousand remain outstanding under the Amended Term Loan Credit Agreement[71] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 financial results, noting a 4.8% net sales decrease, improved gross margin to 41.3%, and stable Adjusted EBITDA at $38,227 thousand Key Financial and Operating Metrics Q1 2024 comparable sales decreased by 9%, with 658 stores and stable Adjusted EBITDA at $38,227 thousand Key Financial and Operating Metrics | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Number of stores | 658 | 638 | | Comparable sales | (9)% | (14)% | | Net income (in thousands) | $12,172 | $11,808 | | Adjusted EBITDA (in thousands) | $38,227 | $38,260 | Results of Operations Q1 2024 net sales decreased 4.8%, gross margin expanded to 41.3%, and SG&A expenses rose 7.4% - Net sales decreased by $14,100 thousand (4.8%) in Q1 2024, driven by lower sales transactions and PLCC funds[127] - Gross profit as a percentage of net sales increased by 3.6% to 41.3%, primarily due to improved merchandise margin from reduced product costs[128] - SG&A expenses increased by $5,200 thousand (7.4%), mainly due to a $4,300 thousand increase in performance bonuses and $3,200 thousand in headquarters expenses[129] Liquidity and Capital Resources Primary liquidity from operations and ABL Facility, with $116,100 thousand available and net cash from operations increasing to $27,624 thousand - As of May 4, 2024, availability under the ABL Facility was $116,100 thousand, with no borrowings outstanding[133] Cash Flow Summary | Cash Flow Activity | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $27,624 | $11,223 | | Net cash used in investing activities | $(7,008) | $(5,660) | | Net cash used in financing activities | $(11,859) | $(800) | Quantitative and Qualitative Disclosures About Market Risk The company's market risk profile remains materially unchanged from its Annual Report on Form 10-K disclosures - The company's market risk profile has not materially changed since its last annual report[144] Controls and Procedures Management concluded disclosure controls were effective as of May 4, 2024, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of May 4, 2024[145] - There were no changes during the first quarter of 2024 in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, these controls[146] Part II Legal Proceedings The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business - The company is not presently party to any legal proceedings that it believes would have a material adverse effect on its business[148] Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the risk factors disclosed in the Annual Report on Form 10-K have occurred[149] Unregistered Sales of Equity Securities and Use of Proceeds No shares were repurchased under the $100,000 thousand program in Q1 2024, with $44,900 thousand remaining available - The company did not repurchase any shares of its common stock during the three months ended May 4, 2024[150] - As of May 4, 2024, approximately $44,900 thousand remained available for repurchases under the authorized share repurchase program[150] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[151] Mine Safety Disclosures This item is not applicable to the company - Not applicable[152] Other Information The company reported no other information for this item - None[153] Exhibits This section provides an index of exhibits filed with the Form 10-Q, including agreements and officer certifications