Torrid (US:CURV)2025-09-04 21:30Financial Data and Key Metrics Changes - Net sales for Q2 were $262.8 million, down from $284.6 million year-over-year, with comparable sales declining 6.9% [14][15] - Gross profit decreased to $93.5 million from $110.3 million, resulting in a gross margin of 35.6%, down from 38.7% [14][15] - Net income was $1.6 million or $0.02 per share, compared to $8.3 million or $0.08 per share in the prior year [15] - Adjusted EBITDA was $21.5 million, representing an 8.2% margin, down from $34.6 million and 12.2% margin last year [15] Business Line Data and Key Metrics Changes - Strong performance was noted in bottoms (denim and non-denim), dresses, and swim, while tops experienced softness due to graphic tees and crop tops [6][14] - Sub-brands are expected to represent 25% to 30% of the total assortment next year, with a current expectation of 10% for this year [24][25] Market Data and Key Metrics Changes - Digital sales are approaching 70% of total demand, indicating a significant shift in customer preferences [9] - Customer retention from store closures is performing at target rates, with a goal to retain at least 60% of customers [10][17] Company Strategy and Development Direction - The company is executing a store optimization plan, closing up to 180 stores to reallocate resources and respond to customer shopping preferences [4][11] - Increased marketing investments are planned to enhance brand awareness and customer acquisition, with an additional $5 million allocated for the second half of the year [9][19] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer sentiment remains cautious, with a focus on value orientation due to economic pressures [5][27] - The company anticipates a full-year net sales range of $1.015 billion to $1.030 billion, with adjusted EBITDA expected between $80 million and $90 million [19][20] Other Important Information - The company repurchased approximately 6 million shares at $3.50 per share, utilizing $20 million of cash [16] - Total liquidity remains strong at $111.7 million, with total debt reduced to $288.4 million [16][18] Q&A Session Summary Question: Health of customer and appetite for newness - Management indicated strong health among existing customers, particularly top-tier customers, with positive reactions to new sub-brands [23] Question: EBITDA outlook change - The impact of tariffs and additional promotional activities were discussed as factors affecting EBITDA outlook [28][29] Question: Performance exiting Q2 through August - The business showed softer performance during peak holiday periods but had a strong June semi-annual sale [43] Question: Customer pushback on price increases - Price increases related to tariffs were minimal and specific, with ongoing concerns about pricing from customers [45][46]