Torrid Holdings (CURV) Plunges 24.8%: What's Fueling the Freefall?

Summary
• Torrid Holdings (CURV) slumps 24.79% intraday to $1.79, its lowest since Q2 2025.
• Q2 earnings reveal 6.9% comparable sales drop, 35.6% gross margin, and $1.6M net income.
• Analysts cut price targets, with BofA lowering CURV to $6 from $7 while BTIG remains neutral.

Today’s catastrophic selloff in CURV reflects investor panic over deteriorating fundamentals, including margin compression, store closures, and a $50M tariff hit. The stock’s 22% intraday drop has pushed it to a 52-week low of $1.76, with technical indicators painting a bearish picture. As the Apparel sector grapples with broader retail challenges, CURV’s unique struggles—sub-brand uncertainty and digital transition risks—have amplified its volatility.

Q2 Earnings and Tariff Woes Trigger Sharp Selloff
Torrid’s Q2 earnings report delivered a one-two punch to investor sentiment. Net sales fell 7.7% to $262.8M, with comparable sales down 6.9% as store closures and weak footwear demand eroded revenue. Gross margin contracted to 35.6% from 38.7%, while adjusted EBITDA slumped to $21.5M (8.2% margin) from $34.6M (12.2% margin) a year ago. Management’s guidance cut—$1.015B–$1.030B net sales vs. $1.030B–$1.055B previously—underscored deteriorating fundamentals. Tariffs added $15M in margin pressure, with 80% mitigated but 20% persisting. The stock’s 22% drop reflects fears that sub-brand growth and digital shift may not offset these headwinds soon.

Apparel Sector Mixed as CURV Underperforms
The Apparel, Accessories, and Luxury Goods sector saw mixed performance, with Burberry rejoining the FTSE 100 and LVMH upgrading. However, CURV’s 22% decline starkly contrasted with peers like Nike (NKE), which fell 1.66% on broader retail concerns. While the sector grapples with inflation and shifting consumer preferences, CURV’s aggressive store closures and margin compression highlight its unique challenges. Unlike luxury peers leveraging brand equity, CURV’s value proposition hinges on unproven sub-brands and cost-cutting, making its trajectory distinct.

Options and ETF Plays Amid Volatility
• 200-day MA: $4.69 (far above current price)
• RSI: 68.42 (neutral to overbought)
• MACD: -0.106 (bearish divergence)
• Bollinger Bands: $2.065–$2.35 (price at lower band)

CURV’s technicals paint a bearish picture, with price near its 52-week low and MACD signaling downward momentum. The RSI’s 68.42 suggests overbought conditions may reverse, while Bollinger Bands indicate oversold territory. Given the stock’s 11.68% turnover rate and 7.74 P/E, short-term volatility is likely. Aggressive bearish plays include the CURV20260220P2.5 put option, which offers a 65.06% implied volatility and 2.47% leverage ratio. With a delta of -0.661 and theta of -0.0004, this contract benefits from time decay and price declines. A 5% downside to $1.765 would yield a $0.735 payoff (max profit). For bulls, the 200-day MA at $4.69 is a distant target, but near-term resistance at $2.10 (intraday high) remains critical. The ETF data gap limits leveraged plays, but the sector’s mixed performance suggests caution. Bottom line: Short-term bears should target the $2.50 strike, while long-term investors may wait for a clearer bottom.

Backtest Torrid Holdings Stock Performance
I attempted to identify –25 % plunge events for CURV using two different proxies:1. Intraday-low vs. previous-close: the public data interface we can access does not expose the intraday low (or open / close) fields that are required to compute this accurately. 2. Close-to-close drops ≥ 25 %: after scanning every trading day from 1 Jan 2022 through 5 Sep 2025, no day satisfied that threshold, so the back-test engine returned an empty event set.Because there are no qualifying events under the definitions above, the back-test cannot proceed. To move forward, please let me know one of the following:• Accept a looser criterion (e.g., –20 % intraday … or –15 % daily close-to-close). • Provide any specific dates you’d like analysed. • Narrow the time-frame (for example, just 2022–2023). Once we have at least one event date I can immediately run the event back-test and show the results.

CURV at Crossroads: Watch for $2.50 Put Payoff or Sub-Brand Catalyst
Torrid’s 22% drop has created a high-risk, high-reward scenario. While Q2 results highlight margin pressure and store closure risks, the company’s sub-brand expansion and digital shift offer long-term hope. The CURV20260220P2.5 put option is a top play for near-term bearish bets, but investors must monitor the $2.10 intraday high for a potential rebound. Meanwhile, the Apparel sector’s mixed performance, led by Nike’s -1.66% move, underscores broader retail fragility. Action: Aggressive short-sellers target the $2.50 strike; long-term investors watch for sub-brand traction or a rebound above $2.10.