Torrid (CURV) Q2 2025 earnings summary

Executive summary

• Q2 net sales reached $284.6 million, at the high end of guidance, with adjusted EBITDA of $34.6 million (12.2% margin) and net income of $8.3 million, both exceeding expectations due to improved gross margin and cost controls.

• Gross margin expanded by 323 basis points to 38.7%, driven by lower product costs and higher regular price sales.

• Regular price comparable sales grew 6.4%, while clearance/markdown comps declined 50%, resulting in a blended comp of -0.8%.

• Inventory was reduced by 19% year-over-year, ending the quarter with $54 million in cash and no revolver borrowings.

• Store count increased to 657, with five new stores opened and six closed during the quarter.

Financial highlights

• Net sales for Q2 were $284.6 million, down 1.6% year-over-year.

• Adjusted EBITDA rose to $34.6 million (12.2% of net sales), up from $32.2 million (11.1%) last year.

• Net income was $8.3 million ($0.08/share), up from $6.6 million ($0.06/share) last year, including a $2.1 million one-time severance expense.

• Gross profit for the six months rose 5.8% to $225.7 million, with gross margin improving to 40.0% from 36.6%.

• Cash flow from operations for the six months was $68.4 million, up from $31.7 million year-over-year.

Outlook and guidance

• FY2024 net sales guidance narrowed to $1.135–$1.145 billion; adjusted EBITDA guidance raised to $110–$116 million.

• Q3 net sales expected at $280–$285 million, with adjusted EBITDA of $23–$26 million.

• Capital expenditures projected at $20–$25 million, including new systems and 12–16 new stores.

• Guidance reflects macroeconomic challenges, higher labor costs, and potential regulatory impacts on credit card late fees.

• Cash flow from operations and available credit expected to be sufficient for working capital and capex over the next 12 months.