Sub-brand success & store revamps fuel US' Torrid's FY25 strategy

The company’s net sales for the full year are anticipated to be between $1.080 billion and $1.100 billion, while adjusted EBITDA is expected to fall within the range of $100 million to $110 million. Capital expenditures (capex) are estimated between $15 million and $20 million, directed towards infrastructure and technology investments, along with the planned opening of 4-8 new stores.

This outlook is based on several assumptions, including ongoing macroeconomic challenges and rising labour costs. It does not account for potential volatility due to tariff changes or their possible impact on inflation and consumer demand, Torrid said in a press release.

“As we enter 2025, our strategic priorities are clear: enhancing our product assortment, driving customer growth, and executing our store optimisation plan. Our ongoing store optimisation strategy includes balancing our fleet, enhancing store economics, refreshing store environments, and aligning our sales channels more closely with customer demand—allowing us to further accelerate customer growth,” said Lisa Harper, chief executive officer (CEO) at Torrid.

For full fiscal 2024 (FY24) ended February 1, net sales decreased 4.2 per cent year-over-year (YoY) to $1,103.7 million with comparable sales falling 4.5 per cent. The gross profit margin improved to 37.5 per cent from 35.2 per cent from last fiscal.

The net income rose to $16.3 million, or $0.16 per share, compared to $11.6 million. Adjusted EBITDA increased to $109.1 million, or 9.9 per cent of net sales. Over the year, the company opened 14 Torrid stores and closed 35, maintaining a total of 634 stores at year-end.

Torrid generated net sales of $275.6 million in the fourth quarter (Q4) of FY24, a decrease of 6.1 per cent YoY. The comparable sales decreased 0.8 per cent in Q4. The company reported a net loss of $3.0 million, or ($0.03) per share.

The adjusted EBITDA rose slightly to $16.7 million, or 6.1 per cent of net sales, from $16.4 million, or 5.6 per cent of net sales. In Q4, Torrid store opened 1 store and closed 22.

“We successfully closed fiscal 2024 with positive results, fuelled by product innovation in our core assortment and strong customer response to the launch of our high-growth, higher margin sub-brands. Thoughtful growth of our well received sub-brands set the stage for elevated, new and younger customer engagement, incremental lifestyle purchases, as well as creating a halo effect across the business,” added Harper. “Our fiscal first quarter was off to a choppy start; however, trends have been steadily improving as the quarter has progressed. Our disciplined inventory management, targeted marketing investments, and our diversified supply chain, coupled with our strong financial condition provides us the confidence and flexibility to navigate the current dynamic macro environment, while strategically investing in areas of our business which we believe will fuel long-term profitable growth.”

ALCHEMPro News Desk (SG)