US' Torrid reports weaker Q1, eyes digital-led expansion
Torrid Holdings Inc, a North American D2C women's apparel brand, has reported a 4.9 per cent year-on-year (YoY) decline in net sales to $266 million for the first quarter (Q1) of fiscal 2025 (FY25) ended May 3.
Torrid has reported a 4.9 per cent YoY decline in Q1 FY25 net sales to $266 million, with net income halved to $5.9 million. Gross margin fell to 38.1 per cent and operating cash flow turned negative at $18 million. The company plans up to 180 store closures and expects a $40â€'$45 million revenue hit from pausing China-sourced shoes, but no EBITDA impact.
Comparable sales fell 3.5 per cent, and gross margin narrowed to 38.1 per cent due to lower sales and increased promotional activity. Net income dropped to $5.9 million from $12.2 million a year earlier. Adjusted EBITDA was $27.1 million, or 10.2 per cent of sales. The company ended the quarter with 632 stores after closing two locations.
Operating cash flow turned negative at $18 million, down from a $27.6 million inflow last year. Liquidity stood at $141 million, including $23.7 million in cash, the company said in a release.
'Our sub-brand strategy is delivering positive results, exceeding expectations and helping us reach new and younger customers while driving higher margin sales. With the upcoming launches of Lovesick and Studio Luxe, we're doubling down on this momentum and expect sub-brands to represent nearly a third of our business by 2026,' stated Lisa Harper, chief executive officer.
'At the same time, digital continues to be our customer's preferred channel, now approaching 70 per cent of total demand. We're accelerating our transformation to a more digitally led business, which includes optimising our retail footprint,' Harper continued.
For the second quarter (Q2) of FY25, Torrid projects sales between $250–$265 million and adjusted EBITDA of $18–$24 million.
Full-year guidance includes net sales of $1.03–$1.055 billion and EBITDA of $95–$105 million. The retailer also announced plans to close up to 180 stores and pause its China-sourced shoe category, which is expected to result in a $40–$45 million revenue hit but no impact on EBITDA.
'We remain in a strong financial position and are executing with clarity and focus. I'm incredibly proud of our team's commitment to delivering innovative product, deepening customer connections, and building a more agile, resilient business for the future,' concluded Harper.
Fibre2Fashion News Desk (HU)
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