What Happened?
Shares of women’s plus-size apparel retailer Torrid Holdings (NYSE: CURV) fell 33.9% in the morning session after the company reported weak third-quarter results, which missed analysts' revenue and EBITDA expectations. Its full-year revenue and EBITDA guidance also fell short of Wall Street's estimates. The company observed soft sales trends in late September, which continued through October. Macroeconomic pressures, such as constrained consumer spending and adverse weather events, also created a difficult operating environment. Looking ahead, management emphasizes the need for more innovative and diversified product strategies to adapt to shifting consumer preferences. Overall, this was a weaker quarter.
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What The Market Is Telling Us
Torrid’s shares are extremely volatile and have had 60 moves greater than 5% over the last year. But moves this big are rare even for Torrid and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 14.2% on the news that the company reported strong second-quarter earnings. Torrid blew past analysts' EPS expectations. In addition, its revenue narrowly outperformed Wall Street's estimates.
On the other hand, its revenue guidance for next quarter was underwhelming, and its gross margin missed Wall Street's estimates. Overall, this quarter was mixed but still had some key positives.
Torrid is down 45.1% since the beginning of the year, and at $3.30 per share, it is trading 63.1% below its 52-week high of $8.95 from July 2024. Investors who bought $1,000 worth of Torrid’s shares at the IPO in June 2021 would now be looking at an investment worth $136.65.
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