On June 12, 2024, Torrid Holdings Inc (CURV, Financial) released its 8-K filing for the first quarter of fiscal 2024, showcasing a mixed performance. Torrid Holdings Inc is a direct-to-consumer brand of apparel, intimates, and accessories in North America targeting 27 to 42-year-old women. It is focused on fit and offers high-quality products across a broad assortment that includes tops, bottoms, denim, dresses, intimates, activewear, footwear, and accessories. The company has one reportable segment, which includes the operation of e-Commerce platform and stores.
Performance Overview
Torrid Holdings Inc reported a net income of $12.2 million, or $0.12 per share, surpassing the analyst estimate of $0.09 per share. However, the company's revenue of $279.8 million fell short of the estimated $282.40 million, marking a 4.8% decrease from the $293.9 million reported in the same quarter last year. Comparable sales also saw a decline of 9% in the first quarter.
Financial Achievements and Challenges
Despite the revenue shortfall, Torrid Holdings Inc achieved a gross profit margin of 41.3%, up from 37.7% in the previous year. This 360-basis point improvement was primarily driven by lower product costs through strategic pricing renegotiations with vendors and an increase in sales of regular-priced products. Adjusted EBITDA for the quarter was $38.2 million, or 13.7% of net sales, slightly down from $38.3 million, or 13.0% of net sales, in the first quarter of last year.
Lisa Harper, Chief Executive Officer, stated, “We are pleased with our start to fiscal 2024. In the first quarter we delivered higher-than-expected Adjusted EBITDA driven by strong gross margin expansion, while maintaining our focus on tightly controlling inventory levels. Our customers responded positively to our ongoing assortment changes, leading to improved traffic and sales throughout the quarter.”
Income Statement Highlights
| Metric | Q1 FY2024 | Q1 FY2023 |
|---|---|---|
| Net Sales | $279.8 million | $293.9 million |
| Gross Profit | $115.4 million | $110.6 million |
| Net Income | $12.2 million | $11.8 million |
| Adjusted EBITDA | $38.2 million | $38.3 million |
Balance Sheet and Cash Flow
As of May 4, 2024, Torrid Holdings Inc reported cash and cash equivalents totaling $20.9 million. Total liquidity, including available borrowing capacity under the revolving credit agreement, was $137.0 million. Cash flow from operations for the three-month period ended May 4, 2024, was $27.6 million, compared to $11.2 million for the same period last year.
Outlook
For the second quarter of fiscal 2024, Torrid Holdings Inc expects net sales between $280.0 million and $285.0 million and Adjusted EBITDA between $30.0 million and $34.0 million. For the full year fiscal 2024, the company anticipates net sales between $1.135 billion and $1.155 billion and Adjusted EBITDA between $109.0 million and $116.0 million. Capital expenditures are projected to be between $20 million and $25 million, reflecting infrastructure and technology investments as well as new store openings.
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Explore the complete 8-K earnings release (here) from Torrid Holdings Inc for further details.
