Torrid Holdings Inc. (NYSE:CURV) reported a Q3 EPS of -$0.0114, missing estimates but showing year-over-year improvement.
The company’s revenue was $263.8 million, below expectations, with a noted shortfall attributed to product assortment challenges.
Despite financial hurdles, Torrid achieved a 285 basis point increase in gross profit and saw modest growth in Adjusted EBITDA.
Torrid Holdings Inc. (NYSE:CURV), a leading direct-to-consumer apparel brand specializing in women’s sizes 10 to 30, recently unveiled its third-quarter earnings for fiscal 2024. The company disclosed an earnings per share (EPS) of -$0.0114, falling short of the anticipated EPS of $0.03. This outcome, however, signifies an improvement from the prior year’s loss of $0.03 per share, as emphasized by Zacks Investment Research.
The company’s revenue for the quarter stood at approximately $263.8 million, not meeting the expected $289.3 million. CEO Lisa Harper attributed this shortfall to a lack of newness and novelty in their fall assortments. Despite these challenges, Torrid achieved a 285 basis point increase in gross profit and modest growth in Adjusted EBITDA, indicating some positive financial performance.
Torrid’s financial metrics paint a mixed picture. The company has a price-to-earnings (P/E) ratio of about 31.47, suggesting investors are willing to pay a premium for each dollar of earnings. However, the price-to-sales ratio of 0.43 indicates a relatively low valuation compared to its sales. The enterprise value to sales ratio is around 0.56, reflecting the company’s total valuation in relation to its revenue.
The company’s liquidity and debt levels present potential challenges. With a current ratio of approximately 0.89, Torrid may face difficulties in covering short-term obligations. Additionally, the negative debt-to-equity ratio of -1.04 indicates more liabilities than equity, which could impact financial stability. Despite these concerns, Torrid ended the quarter with $44 million in cash, providing some financial cushion.
During the Q3 2024 earnings conference call, attended by analysts from firms like Goldman Sachs and Morgan Stanley, Torrid’s leadership expressed optimism about future product assortments. CEO Lisa Harper noted a meaningful change in the business environment from late September into October, suggesting potential improvements in customer responses and sales performance.
