What Happened?
Shares of women’s plus-size apparel retailer Torrid Holdings (NYSE: CURV) jumped 4.7% in the afternoon session after it showed signs of a potential turnaround fueled by positive analyst sentiment and improved financial flexibility. This move comes despite the stock having declined over 23% in the past month, pushing it into what some analysts consider oversold territory. Fueling the optimism is a strong consensus among Wall Street analysts, who have been raising their earnings estimates for the current year. Over the last 30 days, the consensus Earnings Per Share (EPS) estimate for Torrid has increased by 5.9%. This upward trend in earnings revisions is often seen as a precursor to potential price appreciation.
After the initial pop the shares cooled down to $2.22, up 3% from previous close.
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What Is The Market Telling Us
Torrid’s shares are extremely volatile and have had 57 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 3% on the news that markets continued to rally amid growing investor optimism for a Federal Reserve interest rate cut in September. This optimism was spurred by a recent Consumer Price Index (CPI) report that did not show runaway inflation, increasing the perceived probability of a rate cut to over 90%. Lower interest rates are generally seen as a positive for the economy as they reduce borrowing costs for consumers, which can stimulate spending on non-essential goods. Consequently, investors bid up shares in the apparel, home furnishings, and automotive retail industries in anticipation of stronger consumer demand.
Torrid is down 58% since the beginning of the year, and at $2.22 per share, it is trading 68.6% below its 52-week high of $7.06 from January 2025. Investors who bought $1,000 worth of Torrid’s shares at the IPO in June 2021 would now be looking at an investment worth $91.72.
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