Torrid’s (NYSE:CURV) Q4 Sales Beat Estimates, Stock Jumps 22.4%

Torrid Holdings (NYSE: CURV), a retailer specializing in women’s plus-size apparel, reported its Q4 CY2023 results, exceeding analysts’ expectations in several key areas. While revenue for the quarter decreased by 2.6% year-on-year to $293.5 million, the company provided a revenue guidance for the next quarter of $279.5 million, which was 5.7% below analysts’ estimates. Despite this, Torrid managed to reduce its GAAP loss per share from $0.04 to $0.04 compared to the same quarter last year.

Here are the highlights from Torrid’s Q4 CY2023 report:

• Revenue: $293.5 million (beat analyst estimates by 6.3%)
• Adjusted EBITDA: $16.4 million (beat analyst estimates by 52%)
• EPS: -$0.04 (beat analyst estimates by 40%)
• Revenue Guidance for Q1 CY2024: $279.5 million (below analyst estimates)
• Management’s Revenue Guidance for FY2024: $1.15 billion (below analyst estimates, implying -0.6% growth)
• Gross Margin (GAAP): 34.5% (up from 31.9% in the same quarter last year)
• Free Cash Flow: -$1.73 million (compared to -$6.88 million in the same quarter last year)
• Same-Store Sales: down 9% year-on-year
• Store Locations: 655 at quarter-end (increased by 16 over the last 12 months)
• Market Capitalization: $477.8 million

Lisa Harper, Torrid’s Chief Executive Officer, expressed optimism about the company’s performance, highlighting improvements in sales and margins driven by customer response to new merchandise collections. However, challenges remain, particularly concerning declining same-store sales over the past eight quarters.

Torrid’s Q4 results showed significant outperformance in adjusted EBITDA and EPS compared to analyst expectations. Although revenue guidance for the next quarter and the full year fell short of expectations, management remains positive about the company’s strategic initiatives and the response from customers to new product offerings.

In summary, while Torrid’s Q4 results were positive overall, tepid guidance suggests ongoing challenges. Nonetheless, management’s efforts to enhance product assortment and optimize investments are driving improving trends in sales and margins. Currently, the stock is trading at $6 per share, reflecting a 22.4% increase after reporting.