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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]

Financial Data and Key Metrics Changes - For the fourth quarter, the company generated sales of $275.6 million and adjusted EBITDA of $16.7 million, exceeding expectations on both the top and bottom line [8][20] - Comparable sales were down 0.8%, marking a significant sequential improvement, with regular price comp trends increasing by 1.6% [8][20] - The company ended the fiscal year with $48.5 million in cash, an increase of $36.8 million compared to the previous year [9][18] - Gross profit was $92.6 million, with a gross margin decline of 90 basis points to 33.6% due to lower volume relative to last year [21] - The net loss for the quarter was $3 million, or negative $0.03 per share, compared to a net loss of $4.1 million, or negative $0.04 per share, in the prior year [23] Business Line Data and Key Metrics Changes - In apparel, the company delivered a positive Q4 comp driven by strength in denim, non-denim bottoms, sweaters, and dresses, which reached an all-time high demand [9] - Inventory levels increased by 4% year-over-year, primarily due to higher in-transit levels, but were down 18% on a two-year basis [10][25] - The new sub brands are expected to comprise approximately 7% to 10% of total receipt investment for the year, self-funded by a reduction in depth across less productive choices [10] Market Data and Key Metrics Changes - The company experienced some choppiness in business during early weeks of the quarter due to macro and consumer uncertainty, but saw a trend line improvement as the quarter progressed [7][8] - The company is targeting to close an additional 40 to 50 stores in fiscal 2025, with the potential for the number to increase as store performance is evaluated [17][27] Company Strategy and Development Direction - The company is focused on three strategic priorities: enhancing product assortment, driving customer growth, and executing a store optimization plan [10][28] - 2025 is designated as the year of the product, with more new items introduced in the first half than in the past six years, aiming to broaden assortments to cater to a wider range of fashion aesthetics [11] - The company is modernizing its core assortment while maximizing the potential of sub brands, which command higher margins and are attracting younger customers [14][70] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism, controlling spending while remaining flexible and agile in response to the uncertain consumer environment [7][8] - The company is taking a prudent approach to guidance, with full-year sales expected to range between $1.08 billion and $1.1 billion, reflecting a careful outlook given the current environment [28][30] - Management noted improvements in customer engagement and traffic trends, indicating a solid fundamental strength of the Torrid customer base [33][36] Other Important Information - The company successfully closed 35 stores in fiscal 2024 and is targeting to close an additional 40 to 50 stores in fiscal 2025, which is expected to reduce fixed costs and free up capital for growth investments [17][27] - The company ended the year with $158 million in liquidity and reduced total debt to $288.6 million, further strengthening its balance sheet [24] Q&A Session Summary Question: What are the latest thoughts on the health of the Torrid consumer? - Management indicated that the fundamental strength of the Torrid customer remains intact, with positive traffic trends but cautious conversion in the short term [33][34] Question: Can you quantify the impact of the 40 to 50 additional store closures this year? - The majority of closures will happen in Q4, with benefits expected to flow through financials in the next year rather than immediately [37][39] Question: Do you anticipate this being a prolonged campaign of closings? - Management does not see this as a prolonged project, with opportunities to reassess the real estate portfolio in the next few years [42][44] Question: What is your guidance embedding on the tariff impact of the year? - Guidance includes all known tariffs, with a flexible sourcing structure to mitigate risks [55][56] Question: How do you think about the puts and takes on gross margin and SG&A throughout the year? - Management expects a little higher SG&A in the first half due to shifted marketing expenses but overall G&A should remain consistent with the prior year [78]