Torrid Reports Fourth Quarter and Fiscal 2023 Results and Initiates Fiscal 2024 Guidance
- Exceeded Q4 guidance with net sales of $293.5 million.
- Gross profit margin increased to 34.5% driven by improved product margins.
- Adjusted EBITDA for Q4 was $16.4 million, showing a 250-bps improvement.
- Net loss of $4.1 million in Q4, compared to $3.8 million in the previous year.
- Full-year net sales decreased by 10.6% to $1,151.9 million.
- Net income for the full year was $11.6 million, down from $50.2 million in the previous year.
- Adjusted EBITDA for the full year was $106.2 million, showing a decrease from $152.4 million in the previous year.
- Opened 36 new stores and closed 20 stores in fiscal year 2023.
- Cash flow from operations for the twelve-month period was $42.8 million.
- Outlook for fiscal 2024 includes net sales between $1.135 billion and $1.155 billion.
- Adjusted EBITDA for fiscal 2024 expected to be between $106 million and $116 million.
- Decrease in net sales for both Q4 and full year fiscal 2023.
- Significant decrease in net income for the full year.
- Adjusted EBITDA decline for the full year compared to the previous year.
- Potential impact of macroeconomic challenges and higher labor costs on future financial performance.
- Consumer Financial Protection Bureau ruling may affect profitability.
Insights
The report from Torrid Holdings Inc. reveals a mix of positive and negative financial indicators. On one hand, the company managed to exceed its fourth-quarter guidance, which is a sign of operational efficiency and could be seen as a positive signal to investors. The improvement in gross profit margin, notably a 250-bps increase, is significant as it suggests better cost management and potentially higher profitability per item sold. However, the reported net loss of $4.1 million, despite being a relatively small figure, indicates that the company is still facing challenges in achieving net profitability.
From a financial perspective, the decrease in net sales year-over-year by 10.6% and the 12% drop in comparable sales are concerning and reflect underlying issues in customer retention or market competition. The store expansion strategy, with 36 new stores opened and 20 closed, suggests an aggressive growth plan, but this needs to be weighed against the backdrop of declining sales. The company's liquidity position, with $12.1 million in cash and cash equivalents and a total liquidity of $114.8 million, provides some cushion, but the cash flow from operations shows a decrease, which could impact future investments and operations.
Looking ahead, the fiscal 2024 guidance anticipates stable adjusted EBITDA figures and a slight decrease in net sales, which could be interpreted as cautious optimism amidst macroeconomic challenges and higher labor costs. This outlook, combined with the potential impact of new regulations on credit card fees, adds an element of uncertainty for investors.
The retail sector, particularly in apparel, is highly competitive and sensitive to consumer trends and economic conditions. Torrid's focus on the plus-size market is a strategic attempt to target a specific customer segment, but the reported 9% decrease in comparable sales for the fourth quarter suggests that the company is not fully capitalizing on this niche. The improvement in gross profit margin, however, indicates that Torrid's efforts in enhancing its assortment and reducing inventory levels may be resonating with customers to some extent.
The strategic initiative to open new stores while closing underperforming ones is a common practice in the retail industry, aimed at optimizing the store footprint. However, the effectiveness of this strategy must be monitored closely, as opening new stores incurs significant costs and the benefits may not be immediately realized, especially in a declining sales environment.
The company's investments in infrastructure and technology, as indicated by the capital expenditure plans for fiscal 2024, are essential for staying competitive in the digital age. These investments could improve the customer experience and operational efficiency, but the payoff needs to be balanced against the capital outlay and the current financial performance.
Understanding consumer behavior and market trends is important for retailers like Torrid. The decline in comparable sales points to a potential shift in consumer preferences or increased competition. It's essential to analyze whether Torrid's assortments and marketing strategies are aligned with current fashion trends and customer expectations. The company's focus on enhancing its assortment and optimizing marketing investments is a step in the right direction, but it needs to translate into positive sales growth.
Additionally, the macroeconomic challenges mentioned in the outlook, including higher labor costs, are industry-wide concerns that could affect consumer spending power and retail margins. The company's anticipation of these challenges in its guidance suggests a realistic approach to planning. However, it's important for Torrid to remain agile and adapt its strategies in response to any economic downturns or shifts in consumer spending habits.
The reference to the Consumer Financial Protection Bureau ruling indicates regulatory risks that could affect Torrid's financial services, such as its private label credit card agreements. This could have implications for customer loyalty programs and financing options, which are important factors in driving repeat business in the retail sector.
- Initiates Fiscal 2024 Guidance
- Delivered Fourth Quarter Net Sales above guidance
-
Fourth Quarter Net Loss of
$4.1 million - Exceeded Fourth Quarter Adjusted EBITDA(1) guidance
Lisa Harper, Chief Executive Officer, stated, “In fiscal 2023 we improved the fundamentals of our business by enhancing our assortment while reducing overall inventory levels, improving product costs, and optimizing our marketing investments. We are encouraged by the improving trends in sales and margins as customers responded to our new merchandise collections. For the fourth quarter we delivered results that exceeded our guidance, providing a strong foundation for the future. As we move into fiscal 2024, we will continue to build on our core strategic initiatives, which we believe will position us to deliver consistent results and generate meaningful cash flow.”
Financial Highlights for the Fourth Quarter of Fiscal 2023
-
Net sales decreased
2.6% to$293.5 million $301.3 million 9% in the fourth quarter. -
Gross profit margin was
34.5% compared to31.9% in the fourth quarter of last year. The 250-bps improvement was primarily driven by improved product margins. -
Net loss of
$4.1 million $0.04 $3.8 million $0.04 -
Adjusted EBITDA(1) was
$16.4 million 5.6% of net sales, compared to$16.4 million 5.4% of net sales, in the fourth quarter of last year. - In the fourth quarter, we opened 23 Torrid stores and closed 11 Torrid stores. The total store count at quarter end was 655 stores.
Financial Highlights for the Full Year of Fiscal 2023
-
Net sales decreased
10.6% to$1,151.9 million $1,288.1 million 12% compared to last fiscal year. -
Gross profit margin was
35.2% compared to35.7% last fiscal year. -
Net Income of
$11.6 million $0.11 $50.2 million $0.48 -
Adjusted EBITDA(1) was
$106.2 million 9.2% of net sales, compared to$152.4 million 11.8% of net sales, last year. - Opened 36 Torrid stores and closed 20 Torrid stores. The total store count at year end was 655 stores.
Full Year Fiscal 2023 Financial and Operating Metrics
|
Fiscal Year Ended |
|||||||
|
(in thousands, except net sales per active customer, number of stores and percentages) |
|||||||
|
February 3, 2024 |
January 28, 2023 |
Year over Year Change |
|||||
Net sales |
$ |
1,151,945 |
|
$ |
1,288,144 |
|
(11 |
)% |
Comparable sales(A) |
|
(12 |
)% |
|
(3 |
)% |
|
|
Number of stores (as of end of period) |
|
655 |
|
|
639 |
|
|
|
Net income (loss) |
$ |
11,619 |
|
$ |
50,209 |
|
(77 |
)% |
Adjusted EBITDA(B) |
$ |
106,219 |
|
$ |
152,350 |
|
(30 |
)% |
| (A) | Comparable sales in fiscal year 2023 compares sales in fiscal year 2023 to sales in the 53-week period ended February 4, 2023. In fiscal year 2022, comparable sales include results from stores that were temporarily closed due to COVID-19. |
| (B) | Please refer to "Non-GAAP Reconciliation" below for a reconciliation of net income (loss) to Adjusted EBITDA. |
Balance Sheet and Cash Flow
Cash and cash equivalents at the end of fiscal 2023 totaled
Cash flow from operations for the twelve-month period ended February 3, 2024 was
Outlook
For the first quarter of fiscal 2024 the Company expects:
-
Net sales between
$277 million $282 million -
Adjusted EBITDA(1) between
$31 million $34 million
For the full year fiscal 2024 the Company expects:
-
Net sales between
$1.13 5 billion$1.15 5 billion -
Adjusted EBITDA(1) between
$106 million $116 million -
Capital expenditures between
$20 million $25 million
The above outlook is based on several assumptions, including, but not limited to, the macroeconomic challenges in the industry in fiscal 2024 as well as higher labor costs. The above outlook does not take into consideration the recent Consumer Financial Protection Bureau ruling which mandates, among other things, decreases in credit card late fees, and could alter the profitability of our agreements with our private label credit card financing company. See “Forward-Looking Statements” for additional information.
Conference Call Details
A conference call to discuss the Company’s fourth quarter and fiscal 2023 results is scheduled for March 28, 2024, at 4:30 p.m. ET. Those who wish to participate in the call may do so by dialing (877) 407-9208 or (201) 493-6784 for international callers. The conference call will also be webcast live at https://investors.torrid.com. For those unable to participate, a replay of the conference call will be available approximately three hours after the conclusion of the call until April 4, 2024.
Notes
(1) |
Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Non-GAAP Reconciliation” for additional information on non-GAAP financial measures and the accompanying table for a reconciliation to the most comparable GAAP measure. The Company does not provide reconciliations of the forward-looking non-GAAP measures of Adjusted EBITDA to the most directly comparable forward-looking GAAP measure because the timing and amount of excluded items are unreasonably difficult to fully and accurately estimate. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results. |
(2) |
Comparable sales for any given period are defined as the sales of Torrid’s e-Commerce operations and stores that it has included in its comparable sales base during that period. The Company includes a store in its comparable sales base after it has been open for 15 full fiscal months. If a store is closed during a fiscal year, it is only included in the computation of comparable sales for the full fiscal months in which it was open. Partial fiscal months are excluded from the computation of comparable sales. Comparable sales in fiscal year 2023 compares sales in fiscal year 2023 to sales in the 53-week period ended February 4, 2023. In fiscal year 2022, comparable sales include results from stores that were temporarily closed due to COVID-19. Comparable sales allow the Company to evaluate how its unified commerce business is performing exclusive of the effects of new store openings. The Company applies current year foreign currency exchange rates to both current year and prior year comparable sales to remove the impact of foreign currency fluctuation and achieve a consistent basis for comparison. |
About Torrid
TORRID is a direct-to-consumer brand of apparel, intimates and accessories in
Non-GAAP Financial Measures
In addition to results determined in accordance with accounting principles generally accepted in
Adjusted EBITDA is a supplemental measure of our operating performance that is neither required by, nor presented in accordance with, GAAP and our calculations thereof may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA represents GAAP net income (loss) plus interest expense less interest income, net of other expense (income), plus provision for income taxes, depreciation and amortization (“EBITDA”), and share-based compensation, non-cash deductions and charges, and other expenses
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 release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. For example, all statements we make relating to our expected first quarter of fiscal 2024, our full year fiscal 2024 performance and our plans and objectives for future operations, growth or initiatives are forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Torrid’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements, including: changes in consumer spending and general economic conditions, including as a result of rising 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
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 March 28, 2023 and in our other filings with the SEC and public communications. You should evaluate all forward-looking statements made in this communication in the context of these risks and uncertainties. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the effect of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. 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 press 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.
TORRID HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (UNAUDITED) (In thousands, except per share data) |
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
February 3, 2024 |
|
January 28, 2023 |
|
February 3, 2024 |
|
January 28, 2023 |
||||||||
Net sales |
$ |
293,539 |
|
|
$ |
301,228 |
|
|
$ |
1,151,945 |
|
|
$ |
1,288,144 |
|
Cost of goods sold |
|
192,382 |
|
|
|
205,049 |
|
|
|
745,967 |
|
|
|
828,605 |
|
Gross profit |
|
101,157 |
|
|
|
96,179 |
|
|
|
405,978 |
|
|
|
459,539 |
|
Selling, general and administrative expenses |
|
80,631 |
|
|
|
77,837 |
|
|
|
293,331 |
|
|
|
297,973 |
|
Marketing expenses |
|
16,511 |
|
|
|
15,827 |
|
|
|
55,499 |
|
|
|
59,941 |
|
Income from operations |
|
4,015 |
|
|
|
2,515 |
|
|
|
57,148 |
|
|
|
101,625 |
|
Interest expense |
|
10,372 |
|
|
|
8,385 |
|
|
|
39,203 |
|
|
|
29,736 |
|
Interest income, net of other (income) expense |
|
(328 |
) |
|
|
(16 |
) |
|
|
(90 |
) |
|
|
207 |
|
(Loss) income before (benefit from) provision for income taxes |
|
(6,029 |
) |
|
|
(5,854 |
) |
|
|
18,035 |
|
|
|
71,682 |
|
(Benefit from) provision for income taxes |
|
(1,959 |
) |
|
|
(2,010 |
) |
|
|
6,416 |
|
|
|
21,473 |
|
Net (loss) income |
$ |
(4,070 |
) |
|
$ |
(3,844 |
) |
|
$ |
11,619 |
|
|
$ |
50,209 |
|
Comprehensive (loss) income: |
|
|
|
|
|
|
|
||||||||
Net (loss) income |
$ |
(4,070 |
) |
|
$ |
(3,844 |
) |
|
$ |
11,619 |
|
|
$ |
50,209 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment |
|
162 |
|
|
|
143 |
|
|
|
(52 |
) |
|
|
(337 |
) |
Total other comprehensive income (loss) |
|
162 |
|
|
|
143 |
|
|
|
(52 |
) |
|
|
(337 |
) |
Comprehensive (loss) income |
$ |
(3,908 |
) |
|
$ |
(3,701 |
) |
|
$ |
11,567 |
|
|
$ |
49,872 |
|
Net (loss) earnings per share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
$ |
0.11 |
|
|
$ |
0.48 |
|
Diluted |
$ |
(0.04 |
) |
|
$ |
(0.04 |
) |
|
$ |
0.11 |
|
|
$ |
0.48 |
|
Weighted average number of shares: |
|
|
|
|
|
|
|
||||||||
Basic |
|
104,137 |
|
|
|
103,693 |
|
|
|
103,990 |
|
|
|
104,342 |
|
Diluted |
|
104,137 |
|
|
|
103,693 |
|
|
|
104,400 |
|
|
|
104,489 |
|
TORRID HOLDINGS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share and per share data) |
|||||||
|
February 3, 2024 |
|
January 28, 2023 |
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
11,735 |
|
|
$ |
13,569 |
|
Restricted cash |
|
399 |
|
|
|
366 |
|
Inventory |
|
142,199 |
|
|
|
180,055 |
|
Prepaid expenses and other current assets |
|
22,229 |
|
|
|
20,050 |
|
Prepaid income taxes |
|
2,561 |
|
|
|
2,081 |
|
Total current assets |
|
179,123 |
|
|
|
216,121 |
|
Property and equipment, net |
|
103,516 |
|
|
|
113,613 |
|
Operating lease right-of-use assets |
|
162,444 |
|
|
|
177,179 |
|
Deposits and other noncurrent assets |
|
14,783 |
|
|
|
8,650 |
|
Deferred tax assets |
|
8,681 |
|
|
|
3,301 |
|
Intangible asset |
|
8,400 |
|
|
|
8,400 |
|
Total assets |
$ |
476,947 |
|
|
$ |
527,264 |
|
Liabilities and stockholders’ deficit |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
46,183 |
|
|
$ |
76,207 |
|
Accrued and other current liabilities |
|
107,750 |
|
|
|
108,847 |
|
Operating lease liabilities |
|
42,760 |
|
|
|
45,008 |
|
Borrowings under credit facility |
|
7,270 |
|
|
|
8,380 |
|
Current portion of term loan |
|
16,144 |
|
|
|
16,144 |
|
Due to related parties |
|
9,329 |
|
|
|
12,741 |
|
Income taxes payable |
|
2,671 |
|
|
|
— |
|
Total current liabilities |
|
232,107 |
|
|
|
267,327 |
|
Noncurrent operating lease liabilities |
|
155,825 |
|
|
|
172,103 |
|
Term loan |
|
288,553 |
|
|
|
304,697 |
|
Deferred compensation |
|
5,474 |
|
|
|
4,246 |
|
Other noncurrent liabilities |
|
6,705 |
|
|
|
9,115 |
|
Total liabilities |
|
688,664 |
|
|
|
757,488 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ deficit: |
|
|
|
||||
Common shares: |
|
1,043 |
|
|
|
1,038 |
|
Additional paid-in capital |
|
135,140 |
|
|
|
128,205 |
|
Accumulated deficit |
|
(347,587 |
) |
|
|
(359,206 |
) |
Accumulated other comprehensive loss |
|
(313 |
) |
|
|
(261 |
) |
Total stockholders’ deficit |
|
(211,717 |
) |
|
|
(230,224 |
) |
Total liabilities and stockholders’ deficit |
$ |
476,947 |
|
|
$ |
527,264 |
|
TORRID HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) |
|||||||||||
|
Fiscal Year Ended |
||||||||||
|
February 3, 2024 |
|
January 28, 2023 |
|
January 29, 2022 |
||||||
OPERATING ACTIVITIES |
|
|
|
|
|
||||||
Net income (loss) |
$ |
11,619 |
|
|
$ |
50,209 |
|
|
$ |
(29,944 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
||||||
Write down of inventory |
|
4,577 |
|
|
|
2,297 |
|
|
|
696 |
|
Operating right-of-use assets amortization |
|
41,366 |
|
|
|
41,839 |
|
|
|
41,648 |
|
Depreciation and other amortization |
|
38,002 |
|
|
|
37,592 |
|
|
|
36,748 |
|
Write off of unamortized original issue discount and deferred financing costs for Amended Term Loan Credit Agreement |
|
— |
|
|
|
— |
|
|
|
5,231 |
|
Share-based compensation |
|
8,042 |
|
|
|
9,980 |
|
|
|
159,754 |
|
Deferred taxes |
|
(5,670 |
) |
|
|
1,863 |
|
|
|
1,266 |
|
Other |
|
(2,436 |
) |
|
|
(1,209 |
) |
|
|
(457 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
||||||
Inventory |
|
33,182 |
|
|
|
(12,028 |
) |
|
|
(65,709 |
) |
Prepaid expenses and other current assets |
|
(2,179 |
) |
|
|
(5,364 |
) |
|
|
(1,949 |
) |
Prepaid income taxes |
|
(480 |
) |
|
|
4,264 |
|
|
|
(5,928 |
) |
Deposits and other noncurrent assets |
|
(6,296 |
) |
|
|
(1,712 |
) |
|
|
(3,058 |
) |
Accounts payable |
|
(30,293 |
) |
|
|
(1,241 |
) |
|
|
5,639 |
|
Accrued and other current liabilities |
|
(1,721 |
) |
|
|
(29,659 |
) |
|
|
28,090 |
|
Operating lease liabilities |
|
(43,532 |
) |
|
|
(42,912 |
) |
|
|
(49,597 |
) |
Other noncurrent liabilities |
|
(1,897 |
) |
|
|
3,900 |
|
|
|
1,222 |
|
Deferred compensation |
|
1,228 |
|
|
|
(2,627 |
) |
|
|
342 |
|
Due to related parties |
|
(3,412 |
) |
|
|
(1,881 |
) |
|
|
6,562 |
|
Income taxes payable |
|
2,671 |
|
|
|
— |
|
|
|
(9,336 |
) |
Net cash provided by operating activities |
|
42,771 |
|
|
|
53,311 |
|
|
|
121,220 |
|
INVESTING ACTIVITIES |
|
|
|
|
|
||||||
Purchases of property and equipment |
|
(26,002 |
) |
|
|
(23,369 |
) |
|
|
(17,552 |
) |
Net cash used in investing activities |
|
(26,002 |
) |
|
|
(23,369 |
) |
|
|
(17,552 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
||||||
Capital distribution to Torrid Holding LLC |
|
— |
|
|
|
— |
|
|
|
(300,000 |
) |
Proceeds from revolving credit facility |
|
592,775 |
|
|
|
832,635 |
|
|
|
5,700 |
|
Payments on revolving credit facility |
|
(593,885 |
) |
|
|
(824,255 |
) |
|
|
(5,700 |
) |
Deferred financing costs for revolving credit facility |
|
— |
|
|
|
— |
|
|
|
(688 |
) |
Principal payments on the New Term Loan Credit Agreement and repayment of Amended Term Loan Credit Agreement and related costs |
|
(17,500 |
) |
|
|
(21,875 |
) |
|
|
(212,775 |
) |
Proceeds from the New Term Loan Credit Agreement, net of original issue discount and deferred financing costs |
|
— |
|
|
|
— |
|
|
|
340,509 |
|
Proceeds from issuances under share-based compensation plans |
|
399 |
|
|
|
746 |
|
|
|
569 |
|
Withholding tax payments related to vesting of restricted stock units and awards |
|
(306 |
) |
|
|
(668 |
) |
|
|
(2,072 |
) |
Repurchases and retirement of common stock |
|
— |
|
— |
|
(31,700 |
) |
|
|
(23,352 |
) |
Net cash used in financing activities |
|
(18,517 |
) |
|
|
(45,117 |
) |
|
|
(197,809 |
) |
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash |
|
(53 |
) |
|
|
(177 |
) |
|
|
213 |
|
(Decrease) increase in cash, cash equivalents and restricted cash |
|
(1,801 |
) |
|
|
(15,352 |
) |
|
|
(93,928 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
13,935 |
|
|
|
29,287 |
|
|
|
123,215 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
12,134 |
|
|
$ |
13,935 |
|
|
$ |
29,287 |
|
SUPPLEMENTAL INFORMATION |
|
|
|
|
|
||||||
Cash paid during the period for interest related to the revolving credit facility and term loan |
$ |
34,195 |
|
|
$ |
29,564 |
|
|
$ |
24,120 |
|
Cash paid during the period for income taxes |
$ |
11,154 |
|
|
$ |
15,601 |
|
|
$ |
58,134 |
|
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
||||||
Property and equipment purchases included in accounts payable and accrued liabilities |
$ |
4,524 |
|
|
$ |
3,959 |
|
|
$ |
3,338 |
|
Reclassification of Certain Statements of Operations and Comprehensive Income Items
In the fourth quarter of fiscal 2022, we made a voluntary change in our accounting policy regarding the classification of royalties, profit-sharing and marketing and promotional funds ("PLCC Funds") we receive pursuant to our private label credit card agreement. Historically, we recorded PLCC Funds as a reduction to selling, general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Under the new policy, we record PLCC Funds in net sales in the consolidated statements of operations and comprehensive income (loss). This reclassification does not have any impact on income from operations, income (loss) before provision for income taxes, net income (loss) or earnings (loss) per share and there was no cumulative effect to stockholders’ deficit or net assets.
The recognition of PLCC Funds in net sales is preferable because it will enhance the comparability of our financial statements with those of many of our industry peers and provide greater transparency into performance metrics relevant to our industry by showing the gross impact of the funds received as net sales instead of as a reduction to selling, general and administrative expenses. The following tables show this change in presentation which has been retrospectively applied to fiscal year 2022 presented in this earnings release.
The impact of this change in accounting principle is reflected in the table below (in thousands):
|
Three Months Ended January 28, 2023 |
|||||||
|
Prior to PLCC Funds Reclass |
|
Change in Accounting Principle |
|
As Reported |
|||
Net sales |
$ |
294,817 |
|
$ |
6,411 |
|
$ |
301,228 |
Cost of goods sold |
|
205,049 |
|
|
— |
|
|
205,049 |
Gross profit |
|
89,768 |
|
|
6,411 |
|
|
96,179 |
Selling, general and administrative expenses |
|
71,426 |
|
|
6,411 |
|
|
77,837 |
Marketing expenses |
|
15,827 |
|
|
— |
|
|
15,827 |
Income from operations |
$ |
2,515 |
|
$ |
— |
|
$ |
2,515 |
|
|
|
|
|
|
|||
|
Twelve Months Ended January 28, 2023 |
|||||||
|
Prior to PLCC Funds Reclass |
|
Change in Accounting Principle |
|
As Reported |
|||
Net sales |
$ |
1,254,136 |
|
$ |
34,008 |
|
$ |
1,288,144 |
Cost of goods sold |
|
828,605 |
|
|
— |
|
|
828,605 |
Gross profit |
|
425,531 |
|
|
34,008 |
|
|
459,539 |
Selling, general and administrative expenses |
|
263,965 |
|
|
34,008 |
|
|
297,973 |
Marketing expenses |
|
59,941 |
|
|
— |
|
|
59,941 |
Income from operations |
$ |
101,625 |
|
$ |
— |
|
$ |
101,625 |
Non-GAAP Reconciliation
The following table provides a reconciliation of Net (loss) income to Adjusted EBITDA for the periods presented (dollars in thousands):
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||
|
February 3, 2024 |
|
January 28, 2023 |
|
February 3, 2024 |
|
January 28, 2023 |
|||||||
Net (loss) income |
$ |
(4,070 |
) |
|
$ |
(3,844 |
) |
|
$ |
11,619 |
|
|
$ |
50,209 |
Interest expense |
|
10,372 |
|
|
|
8,385 |
|
|
|
39,203 |
|
|
|
29,736 |
Interest income, net of other (income) expense |
|
(328 |
) |
|
|
(16 |
) |
|
|
(90 |
) |
|
|
207 |
(Benefit from) provision for income taxes |
|
(1,959 |
) |
|
|
(2,010 |
) |
|
|
6,416 |
|
|
|
21,473 |
Depreciation and amortization(A) |
|
9,381 |
|
|
|
9,093 |
|
|
|
36,484 |
|
|
|
36,074 |
Share-based compensation(B) |
|
2,061 |
|
|
|
2,412 |
|
|
|
8,042 |
|
|
|
9,980 |
Non-cash deductions and charges(C) |
|
462 |
|
|
|
183 |
|
|
|
816 |
|
|
|
2,493 |
Other expenses(D) |
|
509 |
|
|
|
2,170 |
|
|
|
3,729 |
|
|
|
2,178 |
Adjusted EBITDA |
$ |
16,428 |
|
|
$ |
16,373 |
|
|
$ |
106,219 |
|
|
$ |
152,350 |
| _____________________________ | |
| (A) | Depreciation and amortization excludes amortization of debt issuance costs and original issue discount that are reflected in interest expense. |
| (B) | Share-based compensation in fiscal year 2023 includes awards that will be settled in cash as they are accounted for as share-based compensation in accordance with ASC 718, Compensation—Stock Compensation, similar to awards settled in shares. |
| (C) | Noncash deductions and charges includes losses on property and equipment disposals and the net impact of noncash rent expense. |
| (D) | Other expenses include severance costs for certain key management positions, certain litigation fees, and the reimbursement of certain management expenses, primarily for travel, incurred by Sycamore on our behalf, which are not considered |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240328211466/en/
Investors
Lyn Walther
IR@torrid.com
Media
Joele Frank, Wilkinson Brimmer Katcher
Michael Freitag / Arielle Rothstein / Lyle Weston
Media@torrid.com
Source: Torrid Holdings Inc.
FAQ
What were Torrid Holdings Inc.'s (CURV) net sales for the fourth quarter of fiscal 2023?
What was the gross profit margin for Torrid Holdings Inc. (CURV) in the fourth quarter of fiscal 2023?
What was the net loss for Torrid Holdings Inc. (CURV) in the fourth quarter of fiscal 2023?
How did Torrid Holdings Inc. (CURV) perform in terms of adjusted EBITDA in the fourth quarter of fiscal 2023?
What was Torrid Holdings Inc.'s (CURV) net sales for the full year of fiscal 2023?
What was the net income for Torrid Holdings Inc. (CURV) in the full year of fiscal 2023?
What was the adjusted EBITDA for Torrid Holdings Inc. (CURV) in the full year of fiscal 2023?
How many new stores did Torrid Holdings Inc. (CURV) open and close in fiscal year 2023?
What is the outlook for Torrid Holdings Inc. (CURV) for the first quarter of fiscal 2024 in terms of net sales?
What is the expected adjusted EBITDA range for Torrid Holdings Inc. (CURV) in the first quarter of fiscal 2024?
