Torrid Holdings Inc. reported its financial results for the second quarter of fiscal year 2024, which ended on August 3, 2024. The company experienced a slight decline in net sales, reporting $284.6 million, down from $289.1 million in the same period of the previous year, representing a decrease of 1.6%. For the six-month period, net sales totaled $564.4 million, a decrease of 3.2% from $583.0 million in the prior year.

Despite the decline in sales, Torrid's gross profit increased to $110.3 million for the three months ended August 3, 2024, compared to $102.7 million for the same period in 2023, reflecting a gross margin improvement from 35.5% to 38.7%. For the six-month period, gross profit rose to $225.7 million, up from $213.3 million, with the gross margin increasing to 40.0% from 36.6%.

Operating income for the second quarter was $20.4 million, slightly up from $20.2 million in the prior year, while net income increased to $8.3 million from $6.6 million. The company reported net income of $20.5 million for the six-month period, compared to $18.4 million in the previous year. Adjusted EBITDA also showed growth, reaching $34.6 million for the quarter and $72.8 million for the six months, compared to $32.2 million and $70.4 million, respectively, in the prior year.

Torrid's total assets increased to $487.5 million as of August 3, 2024, up from $476.9 million at the end of the previous fiscal period. Current assets rose significantly to $217.2 million, driven by a substantial increase in cash and cash equivalents, which reached $53.9 million, compared to $11.7 million in February 2024. However, total current liabilities also increased to $245.6 million from $232.1 million.

The company has continued to invest in its operations, with selling, general, and administrative expenses rising to $76.8 million for the quarter, up from $69.6 million, reflecting a 10.4% increase. This increase is attributed to higher marketing and operational costs. The total number of stores increased by 18, bringing the total to 657 as of August 3, 2024.

In terms of strategic developments, Torrid undertook a workforce reduction of approximately 5% in July 2023, incurring a recognized expense of $1.5 million. The company remains compliant with its debt covenants under the Amended Term Loan Credit Agreement, with total borrowings of $296.6 million as of the end of the quarter. The effective tax rate for the quarter was reported at 26.9%, down from 37.9% in the previous year, attributed to a reduction in non-deductible compensation.

Overall, Torrid Holdings Inc. continues to navigate a challenging retail environment while focusing on improving profitability and operational efficiency.