Torrid reports lower than expected sales for Q3

Torrid Holdings Inc. reported a net sales decline of 4.2 percent to 263.8 million dollars for its third quarter compared to 275.4 million dollars reported for the same period last year.

Comparable sales dropped 6.5 percent during the 12 weeks to November 2, 2024 reported the direct-to-consumer plus-sized apparel, intimates, and accessories brand on Tuesday, as the brand cites a lack of newness and novelty in its fall collection as part of the reason for its lackluster sales.

The company reported a gross profit margin of 36.1 percent, up from 33.2 percent last year, a 285 basis point improvement driven by lower product costs and higher sales of full-priced items. The net loss narrowed to 1.2 million dollars compared to a net loss of 2.7 million dollars, in the same period last year.

Adjusted EBITDA reached 19.6 million dollars, representing 7.4 percent of net sales, slightly up from 19.4 million dollars, or 7.0 percent of net sales, in the prior year. Torrid Holdings Inc. also reported that it opened two Torrid stores and closed four during its third quarter, ending the period with a total of 655 locations.

“Our third quarter results were below our expectations as our fall assortments did not offer enough newness and novelty,” said Lisa Harper, chief executive officer of Torrid, in a statement. “We also saw the environment change meaningfully from the end of September and into October. Despite the weaker top-line sales, we delivered a positive full-price comp and modest adjusted EBITDA growth. We ended the quarter with clean inventory levels, down 19 percent to last year, and 44 million dollars in cash.”

“While we are encouraged by our customers’ response to the newness in our assortments, given the volatility we have seen in our business, and recognizing that there is still a considerable amount of the quarter ahead of us, we are taking a prudent approach to our fourth quarter outlook. As we move into fiscal 2025, we are confident that we have put in place the necessary changes and strategies to position us for growth.”

For the fourth quarter of fiscal 2024, the company anticipates net sales ranging from 255 million to 270 million dollars, with adjusted EBITDA expected to be between 9 million and 15 million dollars.