Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Lisa, could you elaborate on the health of the Torrid consumer and the expected contribution from scaling successful sub-brands? A: Lisa Harper, CEO, noted that the Torrid consumer remains fundamentally strong with high engagement in their loyalty program. While traffic trends are positive, conversion is slightly conservative. The strategy focuses on modernizing core elements like denim and expanding product aesthetics, which is showing positive momentum. The sub-brand excitement is attracting traffic, indicating a solid customer appetite for diverse products.
Q: Can you quantify the impact of the 40 to 50 additional store closures this year on revenues and EBITDA margins? A: Paula Dempsey, CFO, explained that most closures will occur in Q4, with minimal impact this year but more significant effects expected next year. The benefits from last year's 35 closures will reflect in this year's financials, improving margins and G&A.
Q: Do you anticipate a prolonged campaign of store closures, and is there potential to re-engage customers in closed markets? A: Paula Dempsey stated that while they have the opportunity to review 60% of their store fleet, not all will close. The focus is on optimizing locations, particularly moving from enclosed malls to outdoor centers. Lisa Harper added that they are testing new store formats to align with customer preferences and enhance the shopping experience.
Q: How did new products perform during the period of softer traffic? A: Lisa Harper mentioned that new product lines launched in late December and January, with improvements in traffic and engagement following initial weeks. Upcoming launches, like Belle Isle and new deliveries of existing sub-brands, are expected to provide further insights and drive engagement.
Q: What is your guidance embedding on the tariff impact for the year? A: Lisa Harper stated that the guidance includes known tariffs, with a flexible sourcing structure to navigate changes. They have diversified sourcing away from China to countries like Vietnam, Cambodia, and Bangladesh, maintaining strong vendor relationships to manage potential tariff impacts.
Q: What impact are you seeing from promotions and clearance sales, and what is embedded in the outlook? A: Lisa Harper noted that clearance sales are moderating, with expectations for more promotional activity due to macro uncertainties. They anticipate solid margin results for the year, with some pressure on first margins due to potential increased promotions.
Q: How sizable could the new sub-brands be, and how does this affect inventory growth? A: Ashlee Wheeler explained that sub-brands represent about 10% of the business and receipt investments, funded by reducing inventory in less productive core lines. Overall inventory is expected to remain flat, with timing differences quarter to quarter.
Q: What are the other categories of sub-brands you are excited about for 2025? A: Lisa Harper mentioned upcoming launches like Belle Isle, Lovesick, True by Torrid, and studio concepts. These aim to fulfill diverse customer needs, leveraging Torrid's understanding of its customer base to drive new customer acquisition and frequency among existing customers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.免責聲明:投資有風險,本文並非投資建議,以上內容不應被視為任何金融產品的購買或出售要約、建議或邀請,作者或其他用戶的任何相關討論、評論或帖子也不應被視為此類內容。本文僅供一般參考,不考慮您的個人投資目標、財務狀況或需求。TTM對信息的準確性和完整性不承擔任何責任或保證,投資者應自行研究並在投資前尋求專業建議。