Torrid Holdings Reports 4.2% Decrease in Net Sales, Achieves Increased Net Income

Torrid Holdings Inc. reported a decrease in net sales for the fiscal year ending February 1, 2025, totaling $1.1 billion, down 4.2% from $1.15 billion in the previous year. The decline was attributed to reduced sales transaction values and a decrease in PLCC Funds, alongside a loss of $21.7 million in sales due to the absence of a 53rd week that had occurred in fiscal year 2023. Despite the drop in sales, the company achieved a net income of $16.3 million, an increase from $11.6 million in the prior year, reflecting improved gross profit margins driven by reduced product costs and an increase in regular-priced sales.

Operationally, Torrid's total store count decreased by 21 locations, or 3.2%, to 634 stores. The company reported a comparable sales decline of 5.0%, indicating challenges in maintaining customer engagement. Active customers at the end of the fiscal year numbered approximately 3.66 million, a slight decrease from 3.76 million the previous year. The average net sales per active customer also fell to $302 from $306, highlighting a trend of reduced spending among existing customers.

Strategically, Torrid has focused on enhancing its product offerings and customer experience. The company continues to invest in its marketing efforts, although marketing expenses slightly decreased to $54.2 million from $55.5 million. The company also implemented a workforce reduction of about 5% at its headquarters in July 2023, aimed at streamlining operations and reducing costs. Additionally, Torrid has been diversifying its vendor base to mitigate risks associated with sourcing, particularly from China, where approximately 48.5% of its products were sourced in fiscal year 2024.

Looking ahead, Torrid's management expressed cautious optimism, emphasizing the importance of adapting to changing consumer preferences and enhancing its omni-channel retail strategy. The company aims to leverage its loyalty program to drive customer retention and increase sales. However, it also acknowledged potential risks, including economic conditions that could impact consumer spending and the ongoing challenges of managing supply chain disruptions. The company remains committed to maintaining a strong brand presence and improving operational efficiencies to navigate these challenges effectively.