We believe Adjusted EBITDA facilitates operating performance comparisons from period to period by isolating the effects of certain items that vary from period to period without any correlation to ongoing operating performance. We also use Adjusted EBITDA as one of the primary methods for planning and forecasting the overall expected performance of our business and for evaluating on a quarterly and annual basis, actual results against such expectations.

Further, we recognize Adjusted EBITDA as a commonly used measure in determining business value and, as such, use it internally to report and analyze our results and as a benchmark to determine certain non-equity incentive payments made to executives.

Adjusted EBITDA has limitations as an analytical tool. This measure is not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to or substitute for net income (loss), income (loss) from operations, earnings (loss) per share or any other performance measures determined in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Forward-Looking Statements

Certain statements made in this earnings release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this earnings release are forward-looking statements. Forward-looking statements reflect our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "can have," "likely" and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology).

For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those that we expected, including:

-- the adverse impact of rulemaking changes implemented by the Consumer Financial Protection Bureau on our income streams, profitability and results of operations;

-- changes in consumer spending and general economic conditions;

-- the negative impact on interest expense as a result of steep interest rates;

-- inflationary pressures with respect to labor and raw materials and global supply chain constraints that could increase our expenses;

-- our ability to identify and respond to new and changing product trends, customer preferences and other related factors;

-- our dependence on a strong brand image;

-- increased competition from other brands and retailers;

-- our reliance on third parties to drive traffic to our website;

-- the success of the shopping centers in which our stores are located;

-- our ability to adapt to consumer shopping preferences and develop and maintain a relevant and reliable omni-channel experience for our customers;

-- our dependence upon independent third parties for the manufacture of all of our merchandise;

-- availability constraints and price volatility in the raw materials used to manufacture our products;

-- interruptions of the flow of our merchandise from international manufacturers causing disruptions in our supply chain;

-- our sourcing a significant amount of our products from China;

-- shortages of inventory, delayed shipments to our e-Commerce customers and harm to our reputation due to difficulties or shut-down of our distribution facility;

-- our reliance upon independent third-party transportation providers for substantially all of our product shipments;

-- our growth strategy;

-- our failure to attract and retain employees that reflect our brand image, embody our culture and possess the appropriate skill set;

-- damage to our reputation arising from our use of social media, email and text messages;

-- our reliance on third-parties for the provision of certain services, including real estate management;

-- our dependence upon key members of our executive management team;

-- our reliance on information systems;

-- system security risk issues that could disrupt our internal operations or information technology services;

-- unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer system, third-party computer systems we rely on, or otherwise;

-- our failure to comply with federal and state laws and regulations and industry standards relating to privacy, data protection, advertising and consumer protection;

-- payment-related risks that could increase our operating costs or subject us to potential liability;

-- claims made against us resulting in litigation;

-- changes in laws and regulations applicable to our business;

-- regulatory actions or recalls arising from issues with product safety;

-- our inability to protect our trademarks or other intellectual property rights;

-- our substantial indebtedness and lease obligations;

-- restrictions imposed by our indebtedness on our current and future operations;

-- changes in tax laws or regulations or in our operations that may impact our effective tax rate;

-- the possibility that we may recognize impairments of long-lived assets;

-- our failure to maintain adequate internal control over financial reporting; and

-- the threat of war, terrorism or other catastrophes, including natural disasters, that could negatively impact our business.

The outcome of the events described in any of our forward-looking statements are also subject to risks, uncertainties and other factors described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on April 2, 2024 and in our other filings with the SEC and public communications. You should evaluate all forward-looking statements made in this earnings release in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not include all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the outcomes or affect us or our operations in the way we expect. The forward-looking statements included in this earnings release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise except to the extent required by law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

Investors and others should note that we may announce material information to our investors using our investor relations website , SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media, to communicate with our investors and the public about our company, our business and other issues. It is possible that the information that we post on social media could be deemed to be material information. We therefore encourage investors to visit these websites from time to time. The information contained on such websites and social media posts is not incorporated by reference into this filing. Further, our references to website URLs in this filing are intended to be inactive textual references only.

 
                           TORRID HOLDINGS INC. 
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
                          AND COMPREHENSIVE LOSS 
                               (UNAUDITED) 
                   (In thousands, except per share data) 
 
                                             Three Months Ended 
                                  ---------------------------------------- 
                                   November 2, 2024     October 28, 2023 
                                  ------------------  -------------------- 
Net sales                          $        263,766    $        275,408 
Cost of goods sold                          168,609             183,906 
                                      -------------       ------------- 
Gross profit                                 95,157              91,502 
Selling, general and 
 administrative expenses                     74,899              71,881 
Marketing expenses                           13,056              12,739 
                                      -------------       ------------- 
Income from operations                        7,202               6,882 
Interest expense                              8,784               9,757 
Other income, net of other 
 expense                                       (362)                267 

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