Torrid (CURV) Q2 2025 earnings summary

Executive summary

• Q2 net sales reached $284.6 million, at the high end of guidance, with net income of $8.3 million and adjusted EBITDA of $34.6 million, both exceeding expectations due to improved gross margin and cost controls.

• Gross margin expanded by 323 basis points to 38.7%, driven by lower product costs and higher regular price sales.

• Regular price comparable sales grew 6.4%, while clearance/markdown comparable sales declined 50%, resulting in a blended comp of -0.8%.

• Inventory was reduced by 19% year-over-year, driving a $35 million increase in total cash, with quarter-end cash and equivalents at $54 million.

• Store count increased to 657, up from 639 a year ago, reflecting continued investment in physical retail.

Financial highlights

• Net sales for Q2 were $284.6 million, down 1.6% year-over-year.

• Net income was $8.3 million ($0.08 per share), up from $6.6 million ($0.06 per share) last year.

• Adjusted EBITDA rose to $34.6 million (12.2% of net sales), up from $32.2 million (11.1%) year-over-year.

• Cash flow from operations for the six months ended August 3, 2024, was $68.4 million, up from $31.7 million in the prior year period.

• Inventory ended the quarter at $128 million, down 19% year-over-year.

Outlook and guidance

• FY24 net sales projected at $1.135–$1.145 billion; adjusted EBITDA guidance raised to $110–$116 million.

• Q3 net sales expected at $280–$285 million, with adjusted EBITDA of $23–$26 million.

• Capital expenditures for FY24 expected at $20–$25 million, including new systems and 12–16 new stores.

• Guidance reflects macroeconomic challenges, higher labor costs, and regulatory risks, including potential credit card late fee rule changes.

• Positive comparable sales and robust gross margins anticipated for the remainder of the year.