Torrid (CURV) 3 Dec 24 2025 Q3 Earnings call transcript

In the recent earnings call for the third quarter of fiscal 2024, Torrid Holdings, Inc. disclosed both challenges and optimism, highlighting the company's strategic shift towards newness and innovation to drive growth.

Softening Sales and Gross Profit Expansion

Torrid Holdings reported a disappointing third quarter, with sales trends softening in late September and continuing into October. Despite this, the company managed to deliver 285 basis points of gross profit expansion. This achievement was attributed to careful expense management and the strategic shift away from "empty calorie" sales. The company ended the quarter with clean inventory levels, down 19% compared to the previous year, and a cash reserve of $44 million, a significant improvement from the previous year.

Product Innovation and Assortment Initiatives

CEO Lisa Harper acknowledged the lack of newness and novelty in the fall assortments, which did not resonate with customers in an environment of constrained consumer spending. The company is now focused on addressing this issue by infusing more fashion risks and novelty into their product offerings. This strategic shift is expected to improve customer engagement and sales trends, particularly in the fourth quarter and beyond.

New Product Concepts and Diversification

Torrid Holdings is launching a series of new product concepts, starting with the Festi capsule in December, followed by Nightfall and Retro Chic in January. These concepts are designed to cater to a broader audience, positioning the brand to deliver on its mission to provide everything in the customer's closet. The company is also relaunching its active assortment, True by Torrid, in early spring, moving away from a performance focus to a lifestyle-based approach.

Supply Chain Optimization and Merchandising Changes

To optimize its supply chain, Torrid Holdings is making significant progress in refining its sourcing approach. The company aims to decrease the percentage of products sourced from China, reflecting its efforts to diversify and optimize its supply chain. In addition, Kate Horton, the current Chief Merchandising Officer, will now focus exclusively on driving growth in the Intimates category, while Laura Willensky has joined as the Chief Merchandising Officer for Apparel and Accessories. These strategic changes are expected to strengthen Torrid's product offerings across all categories.

Looking Ahead: Positive Outlook for Fiscal 2025

Despite the underperformance in the third quarter, Torrid Holdings remains confident in its long-term strategy of driving growth through product innovation and assortment initiatives. The company is anticipating a surge in new products in the next six months, more than what has been seen in the past six years. This influx of newness, combined with the fine-tuning of core assortments, is expected to deliver positive comparable sales in fiscal 2025.

In conclusion, Torrid Holdings, Inc.'s earnings call for the third quarter of fiscal 2024 highlighted both challenges and optimism, with a strategic focus on newness and innovation to drive growth. The company's commitment to product innovation, supply chain optimization, and merchandising changes is expected to position it well for the future. With a surge in new products and a reinvigorated approach to product, Torrid Holdings is gearing up for a positive outlook in fiscal 2025.