Torrid Holdings Inc (CURV) Reports Mixed Third Quarter Fiscal 2023 Results
Net sales reached $275.4 million, surpassing expectations despite an 8.3% decrease year-over-year.
Net loss reported at $2.7 million, a decline from a net income of $7.3 million in the same quarter last year.
Adjusted EBITDA came in at $19.4 million, outperforming guidance but lower than $32.1 million in the prior year's quarter.
Torrid Holdings Inc (NYSE:CURV) raises its full-year 2023 revenue and EBITDA outlook.
On December 7, 2023, Torrid Holdings Inc (NYSE:CURV) released its 8-K filing, announcing financial results for the third quarter ended October 28, 2023. The company reported net sales of $275.4 million, which was above expectations but represented an 8.3% decrease compared to $300.2 million for the same period last year. The net loss for the quarter was $2.7 million, or ($0.03) per share, compared to a net income of $7.3 million, or $0.07 per share, in the third quarter of the previous year.
Financial Performance Overview
Comparable sales decreased by 8% in the third quarter. The gross profit margin saw a slight decline to 33.2% from 34.0% in the previous year, primarily due to a decrease in PLCC Funds and deleverage of store occupancy costs. Adjusted EBITDA was $19.4 million, or 7.0% of net sales, which is a decrease from $32.1 million, or 10.7% of net sales, in the third quarter of last year. The company ended the quarter with a total of 643 stores, opening five new stores and closing one.
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents totaled $16.0 million for the three months ended October 28, 2023. Total liquidity, including available borrowing capacity under the revolving credit agreement, was $153.5 million. Cash flow from operations for the nine-month period was $33.7 million, compared to $53.9 million for the same period last year.
Future Outlook
For the fourth quarter of fiscal 2023, Torrid Holdings Inc (NYSE:CURV) expects net sales between $267 million and $283 million and Adjusted EBITDA between $9 million and $13 million. For the full year fiscal 2023, the company anticipates net sales between $1.125 billion and $1.140 billion, with Adjusted EBITDA between $99 million and $103 million. Capital expenditures are projected to be between $25 million and $30 million, reflecting investments in infrastructure, technology, and new stores.
Management Commentary
CEO Lisa Harper commented, "Our third quarter results came in ahead of our expectations on both the top and bottom lines. Our customers responded to our new collections, as well as to our new marketing initiatives, which drove improvements in our traffic trends in our stores and online, leading to sequential improvement in our comparable store sales. While we know we have more work to do, we are encouraged by the trends in our business."
The company also announced the promotion of Paula Dempsey to Chief Financial Officer, effective December 4, 2023. The outlook for the company is cautiously optimistic, with acknowledgment of the current promotional and dynamic environment and a focus on controlling expenses and inventory to continue delivering improved results.
Conference Call and Additional Information
A conference call to discuss the third quarter fiscal 2023 results was scheduled for December 7, 2023. A replay of the conference call will be available until December 14, 2023. Investors and interested parties can access more details and the webcast at Torrid's investor relations website.
Value investors may find Torrid Holdings Inc (NYSE:CURV)'s efforts to improve its financial performance and strategic initiatives, such as new marketing campaigns and collection launches, to be of interest. The raised outlook for the full year also suggests a potential for recovery and growth despite the challenges faced in the current fiscal year.
Explore the complete 8-K earnings release (here) from Torrid Holdings Inc for further details.
This article first appeared on GuruFocus.
