Q2 2025 Torrid Holdings Inc Earnings Call Transcript
Key Points
- Torrid Holdings Inc (CURV) is executing a strategic plan with five new sub-brands that are resonating with customers, expected to represent 25% to 30% of the assortment next year.
- The company is on track for meaningful cost savings in fiscal 2026 by closing up to 180 stores this year, reallocating resources to respond to customer shopping preferences.
- Torrid Holdings Inc (CURV) plans to utilize growing free cash flow to reduce debt and repurchase shares, positioning for stronger performance and long-term shareholder value.
- The company experienced strong demand during its semiannual sale event in June, indicating effective promotional strategies.
- Sub-brands are generating a halo effect, driving attachment rates to core categories like denim, pants, and intimate apparel, supporting customer reactivation through targeted marketing.
- Comparable sales declined 6.9% for the quarter, partly due to restructuring in the footwear business and the movement of model search activation from Q2 to Q3.
- Gross margin decreased to 35.6% from 38.7% a year ago, indicating pressure on profitability.
- Net income dropped to $1.6 million or $0.02 per share compared to $8.3 million or $0.08 per share in the prior year quarter.
- The company anticipates up to $10 million in incremental headwinds to margins due to changes in tariff rates.
- Torrid Holdings Inc (CURV) had to be more promotional than anticipated to drive conversion during softer holiday peaks over Memorial Day and July 4th.
Greetings, and welcome to Torrid Holdings second quarter fiscal 2025 earnings conference call. (Operator Instructions) Please note that this conference is being recorded.
It is now my pleasure to pass it over to Chinwe Abaelu. Thank you. You may begin.
Good afternoon, everyone, and thank you for joining Torrid's call today to discuss our financial results for the second quarter of fiscal 2025, which we released this afternoon and can be found on our website at investors.torrid.com.
With me on the call today are Lisa Harper, Chief Executive Officer of Torrid; Paula Dempsey, Chief Financial Officer; Ashlee Wheeler, our Chief Strategy and Planning Officer, is also present and will be participating in the Q&A session.
Before we get started, I would like to remind you of the company's safe harbor language, which I'm sure you're familiar with. Management may make forward-looking statements, including guidance and underlying assumptions.
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