Torrid Holdings Reports 9.4% Decline in Net Sales and $7 Million Net Loss for Fiscal Year Ending January 31, 2026

Torrid Holdings Inc. reported a significant decline in financial performance for the fiscal year ending January 31, 2026, with net sales decreasing by 9.4% to $1,000.1 million, down from $1,103.7 million in the previous fiscal year. The company's gross profit also fell by 15.8% to $348.0 million, resulting in a gross margin of 34.8%, compared to 37.5% in the prior year. The decline in revenue was attributed to a decrease in sales transactions and transaction values, exacerbated by the closure of 151 stores as part of a retail optimization strategy, which reduced the total number of stores to 483.

In terms of profitability, Torrid reported a net loss of $7.0 million, a stark contrast to the net income of $16.3 million recorded in the previous year. The loss was influenced by increased costs associated with merchandise, including higher merchandising payroll and store depreciation expenses, as well as the impact of new tariffs on imported goods. Selling, general, and administrative expenses decreased by 10.9% to $269.2 million, reflecting cost-cutting measures, including reductions in payroll and performance bonuses.

Operationally, Torrid's customer engagement metrics showed a stable base, with 97% of net sales attributed to active customers, a figure consistent with previous years. The company continues to focus on enhancing its e-commerce platform, which accounted for 64% of total net sales, up from 61% in the prior year. The loyalty program, Torrid Rewards, remains a key driver for customer retention, with efforts to convert single-channel customers to omni-channel shoppers, who tend to spend significantly more.

Looking ahead, Torrid's management expressed cautious optimism, emphasizing the importance of adapting to changing consumer preferences and market conditions. The company plans to continue its store optimization strategy while investing in marketing and customer engagement initiatives to drive future growth. However, the ongoing challenges posed by inflation, supply chain disruptions, and evolving trade policies, particularly regarding tariffs, present significant risks to the company's financial outlook.