What Happened:
Shares of women’s plus-size apparel retailer Torrid Holdings (NYSE:CURV) fell 5.2% in the morning session after the company reported first-quarter earnings results. Revenue missed during the quarter, with Comparable store sales declining 9%, primarily due to lower levels of clearance sales compared to the same period last year. The company expects the negative comp impact of clearance to abate in the second half of the year. Regardless, revenue guidance for the next quarter was underwhelming. However, offsetting that negative was the fact that the company reaffirmed full-year revenue guidance previously given while slightly raising full-year adjusted EBITDA guidance. Overall, this was a weaker quarter for the company.
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What is the market telling us:
Torrid's shares are very volatile and over the last year have had 67 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago, when the stock gained 11.5% on the news that the company reported a "beat and raise" quarter. Third-quarter results surpassed analysts' revenue expectations, with the company highlighting notable improvement in both in-store and online traffic on a sequential basis. This positive trend indicated strong momentum heading into the holiday season.
Looking forward, the company not only raised its full-year revenue guidance but also increased projections for adjusted EBITDA, surpassing Wall Street's estimates for both metrics.
Lastly, the company announced the promotion of Paula Dempsey to the role of Chief Financial Officer. Dempsey has served as interim CFO and Senior Vice President of Investor Relations since May 2023. She joined the company in January 2023 with a background as Senior Vice President of Corporate Finance at Mattress Firm. Zooming out, this was a great quarter that shareholders will appreciate.
Torrid is up 7.2% since the beginning of the year, and at $6.44 per share it is trading close to its 52-week high of $6.89 from June 2024. Investors who bought $1,000 worth of Torrid's shares at the IPO in June 2021 would now be looking at an investment worth $266.67.
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