Torrid Holdings Reports Q3 2024 Financial Decline with Improved Gross Profit

Torrid Holdings Inc. reported a decline in financial performance for the third quarter of fiscal year 2024, with net sales decreasing by 4.2% to $263.8 million compared to $275.4 million in the same period last year. The decrease in sales was attributed to lower transaction values and a reduction in private label credit card (PLCC) funds, although this was partially offset by improved pricing strategies. Gross profit for the quarter increased by 4.0% to $95.2 million, driven by reduced product costs and an increase in sales of regular-priced items, resulting in a gross margin of 36.1%, up from 33.2% in the prior year.

In terms of operational metrics, Torrid's store count rose by 12 locations, or 1.9%, bringing the total to 655 stores as of November 2, 2024. Selling, general and administrative expenses increased by 4.2% to $74.9 million, primarily due to higher performance bonuses and legal expenses. Marketing expenses also saw a slight increase of 2.5%, reflecting a strategic focus on enhancing brand visibility through social media and other channels. Despite these increases, the company reported a net loss of $1.2 million for the quarter, an improvement from a loss of $2.7 million in the same period last year.

For the nine-month period ending November 2, 2024, Torrid's net sales totaled $828.2 million, down 3.5% from $858.4 million in the previous year. However, gross profit increased by 5.3% to $320.8 million, with gross margin improving to 38.7% from 35.5%. The company reported net income of $19.3 million for the nine months, compared to $15.7 million in the prior year, indicating a positive trend in profitability despite the decline in sales.

Torrid's liquidity position improved significantly, with net cash provided by operating activities rising to $65.4 million for the nine months ended November 2, 2024, compared to $33.7 million in the same period last year. The company had no borrowings under its asset-based revolving credit facility as of the end of the quarter, with $107.8 million available for future use. The company continues to focus on strategic investments in marketing and technology to enhance customer engagement and drive sales growth.

Looking ahead, Torrid remains cautious about the economic environment, particularly regarding consumer spending and inflationary pressures. The company plans to continue its efforts in expanding its store footprint and enhancing its omni-channel experience to attract and retain customers. Management emphasized the importance of adapting to changing consumer preferences and maintaining a strong brand image to navigate the competitive retail landscape.