Torrid Holdings Posts Q3 Loss, Comparable Sales Decline 6.5% Y/Y

Core Insights - Torrid Holdings Inc. reported third-quarter fiscal 2024 results, with both revenue and earnings missing the Zacks Consensus Estimate, leading to a revised guidance for future performance [1][7]. Financial Performance - The company posted a loss of 1 cent per share, missing the consensus estimate of earnings of 3 cents, but improved from a loss of 3 cents per share in the same quarter last year [2]. - Net sales were $263.8 million, a decline of 4.2% year over year, and below the consensus mark of $283 million. Comparable sales decreased by 6.5% year over year [3]. - Gross profit was $95.2 million, up 4% from $91.5 million in the prior year, with gross margin expanding by 285 basis points to 36.1% due to lower product costs and increased sales of regular-priced products [3]. Expenses and Profitability - Selling and administrative expenses rose by 4.2% to $74.9 million, with these expenses as a percentage of net sales increasing by 230 basis points to 28.4% due to performance bonuses [4]. - Adjusted EBITDA was $19.6 million, a slight increase of 1.1% from $19.4 million in the previous year, with the adjusted EBITDA margin expanding by 40 basis points to 7.4% [5]. Store Operations - The company opened two new Torrid stores and closed four, resulting in a total of 655 stores at the end of the quarter [5]. Financial Health - At the end of the quarter, cash and cash equivalents stood at $44 million, with total liquidity of $151.8 million. The total stockholders' deficit was $189.3 million [6]. Future Outlook - For the fourth quarter, Torrid anticipates net sales between $255 million and $270 million, down from $293.5 million in the previous year, and expects adjusted EBITDA of $9 million to $15 million compared to $16.4 million last year [7]. - For fiscal 2024, the company revised its net sales expectation to a range of $1.083 billion to $1.098 billion, down from $1.135 billion to $1.145 billion, and adjusted EBITDA is now expected to be between $101 million and $107 million [8]. - Capital expenditure is projected at $20 million to $25 million, focusing on infrastructure, technology investments, and new store openings [9]. - The company plans to open 12 to 16 new Torrid stores while closing 30 to 40 locations as part of its store fleet optimization strategy [10].