Torrid (CURV) Q1 2027 earnings summary

Executive summary

• Q1 FY26 net sales were $245.8 million, slightly above guidance but down 7.6% year-over-year, mainly due to store closures and lower sales transactions.

• Adjusted EBITDA was $17.6 million (7.2% margin), at the high end of guidance but down from $27.1 million (10.2%) last year.

• Net income dropped to $0.4 million from $5.9 million year-over-year.

• Store optimization program nearly complete, with 20 closures in Q1, ending with 463 stores and up to 10 more closures expected in Q2.

• Strategic focus has shifted to customer file growth through acquisition, reactivation, and retention, leveraging AI-powered personalization and enhanced marketing.

Financial highlights

• Gross profit was $86.8 million (35.3% margin), down from $101.4 million (38.1%) last year, impacted by tariffs and planned promotions.

• SG&A expenses declined to $63.7 million, leveraging 40 basis points to 25.9% of sales, mainly from lower payroll costs.

• Marketing expenses fell 5.3% to $14.5 million, but rose as a percentage of sales due to deleverage.

• Interest expense was $7.7 million, down from $8.2 million, reflecting lower term loan balances.

• Net cash provided by operations was $11.2 million, compared to net cash used of $18.0 million in the prior year.

Outlook and guidance

• FY26 net sales expected at $940–$960 million; adjusted EBITDA of $65–$75 million, with up to 140 bps margin expansion over FY25.

• Q2 sales expected at $232–$240 million, adjusted EBITDA of $12–$16 million.

• $40 million in expense savings targeted for FY26 from store optimization, with $11 million realized in Q1.

• Capital expenditures for FY26 anticipated at $8–$10 million, front-loaded in Q1.

• Guidance assumes tariffs at 10% in H1 and 15% in H2; tariff refunds not included in guidance.