Torrid Shares Climb on Upbeat Sales Outlook, 2Q Profit Boost

Dow Jones
Sep 05
 
 

Shares of Torrid Holdings climbed after the company guided for higher-than-expected sales in the current quarter, and said an unexpected tariff refund boosted profit in the latest quarter.

The stock gained 17%, to $2.62, on Friday. Shares have more than doubled in value year to date.

The plus-size apparel company late Thursday posted a profit of $5.18 million for its three months ended Aug. 1, compared with a profit of $1.57 million a year earlier.

Quarterly earnings came out to 5 cents a share, compared with analyst forecasts for a quarterly loss of 3 cents a share, according to FactSet.

Net sales fell 12% to $231.7 million, missing Wall Street models for $237.2 million.

Comparable sales, which account for store openings and closings, fell 6.3%.

Chief Executive Lisa Harper said that Torrid's second-quarter results were in line with its expectations.

"Sales trends improved meaningfully as the quarter progressed, with July marking a clear inflection point," she continues. "This improvement reflects early traction from our customer growth strategy and the merchandising course corrections we have made."

For the current quarter, Torrid guided for adjusted Ebitda -- or earnings before interest, taxes, depreciation and amortization -- of $15 million to $20 million, as well as net sales of $230 million to $235 million. Analysts were looking for adjusted Ebitda of $18.5 million on net sales of $227.4 million.

For the year, the company now expects adjusted Ebitda of $76 million to $86 million, up from a prior outlook of $65 million to $75 million. Harper attributed the increase to a tariff refund the company received during the recent period.

Net sales are still projected to come in between $940 million and $960 million. Analysts had expected adjusted Ebitda of $67.2 million on net sales of $951.9 million.

 
 

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