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Yahoo Finance's Brian Sozzi and Julie Hyman speak exclusively with Torrid CEO Liz Munoz about the company's growth since its market debut, retail trends, the state of the plus size fashion industry, Hispanic American Heritage Month, and much more.
BRIAN SOZZI: Torrid is coming off another solid quarter a few months removed from IPOing in July. Second quarter sales rose 34% from a year ago while adjusted operating profit surged 153%, shoppers rebuilt their closets with post-pandemic looks.
Joining us now for an exclusive chat is Torrid CEO Liz Munoz. Liz, good to see you again here. The IPO feels like yesterday but clearly it wasn't. Look, we're in the fall season, what are you seeing consumer shop for?
LIZ MUNOZ: I think our customer in particular is shifting from a very stay at home type of wardrobe to starting to look for wear to work pants, blouses, dresses, things that are going to start to transition her into what she hopefully is the next phase of her life.
JULIE HYMAN: And Liz, it's Julie here, we've been hearing from some fashion retailers that there's sort of this excess in terms of the style that people are looking for. Not only are they getting out of the house, they're getting out in a big way in terms of the style that they're looking for, sort of over the top. Is that what you guys are seeing also?
LIZ MUNOZ: Yeah. Our customer is not quite so over the top but she is looking for color, she's looking for optimism, I think dresses for the holidays this year are going to be exciting and colorful for sure, for her. So I think that's how she'll express it.
BRIAN SOZZI: Liz, last time we talked, we talked a little bit about your company's push into intimate apparel, any update there?
LIZ MUNOZ: Yeah, it's going beautifully. We have some patent pending bras that are absolutely extraordinary, the business has been growing, as you know. Even though the plus size business is enormous and it's growing at twice the rate of straight sizes, intimates is growing even faster than that and our growth outpaces that as well.
So our business has been really good, we are using intimates to really create sticky customers, a customer that buys a bra is far more valuable than one that doesn't. So we're using our loyalty program to make sure that we usher all of our customers into our bras.
JULIE HYMAN: Talk to us about customer acquisition, Liz, because as you said, this market is so huge and so really unaddressed or under addressed, I guess we could say, you guys are addressing it obviously. So how are you reaching out to new customers and how are you-- obviously you're still investing some of your proceeds from your listing, so talk to us about that.
LIZ MUNOZ: Yes. So finding new customers is an absolute priority for us because even though Torrid is a billion dollar business, we have 31% brand awareness and we have just around 4% of the addressable population of customers we could have.
So our mission is really to use influencers, we're doing an ambassador program, our stores are an extraordinary way of acquisition. And then we're really barreling after digital concepts, as we prove them out, we invest more money in them. And shifting away from things like mailers and retentive type behaviors because once we buy our customer, we don't need to keep purchasing her over again.
BRIAN SOZZI: Liz, also since we last spoke, you're one of, I would say, one of your rivals, Gap, they have gotten into the plus size apparel market. Any concerns about them taking some market share?
LIZ MUNOZ: Yeah. You know what's funny is they did not go into the plus size apparel market. They have been, Old Navy has been in the plus-size apparel market since 2004 so what they did is brought the extended size range into their stores. So for me, they've been around forever.
And I'll give you a good example. If you think about year after year after year, the big companies have announced we're going into plus size and everyone gets very worried, we have gone on to have a great year thereafter many times before this. So what I think Torrid does is very, very special and very differentiated.
That said, I will remind you that there are 90 million possible customers in this country, that are wildly underdressed and underserved.
BRIAN SOZZI: Point well taken. Also to big market, clearly consumers are out there shopping at your stores, but are you able to get them the inventories they want? There's been a lot of disruption in the apparel supply chain, most notably coming out of Vietnam, are you seeing any disruptions in your supply chain?
LIZ MUNOZ: Yes we are, for sure. We are seeing anywhere between two to four weeks delays or disruption. As you know, Vietnam has been closed for a period of time, they were supposed to open a couple of days ago, they've extended.
Here's the really good news for Torrid, we do not have the typical retail business where Q4 is this big enormous event that generates 60% of your profits, Q4 for Torrid is like every single other quarter for us. So it's not the same need or challenge to gear up inventories like most other retailers you're seeing.
JULIE HYMAN: And Liz, I want to switch gears a little bit because it is Hispanic Heritage Month that just kicked off this week. You, of course, are a Latina CEO, there still aren't enough female CEOs, I'm guessing that you're the only CEO that we talked to who has a blue purple hair on that front as well. But talk to me about, on the Latin front please, about how to get more diverse folks in the pipeline and up to the executive ranks.
LIZ MUNOZ: Yeah. I think about that a lot because I have been told I am the only Latina CEO currently running a public company in America, and that was pretty shocking to me when I heard that. I think that we need to make sure that we are raising young Latina girls with all the aspirations of everything that they can be, I think it starts there, and then I think there needs to be more mentorship.
I did not realize how grave the situation was but now that I have, I'm pretty motivated to make sure that I get involved in mentoring and in helping more young girls dream of something beyond what they currently know. As a first generation American, I will tell you I certainly did.
BRIAN SOZZI: Liz, are there any programs you can put in place inside of Torrid to help move that along?
LIZ MUNOZ: Yes. So Torrid has a foundation called Toward Strong and its entire mission is to help women. So we have actually been partnering with the YWCA and that has been an unbelievable program, and we do other charitable functions. So, yes, our focus is on young women and the YWCA, in particular, services a lot of young Latina women as well.