Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to Torrid Holdings, Incorporated Fourth Quarter Fiscal 2022 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to Paula Dempsey, Senior Vice President of Finance and Investor Relations. Thank you.

begin. may You

Paula Dempsey

can and are to everyone, Financial Operating financial for Torrid's of today Tim afternoon joining for at and our Good With Torrid; Harper, investors.torrid.com. the thank and Chief fourth Officer Officer. today me and this released discuss which the year Chief found quarter call Chief on XXXX, website call afternoon, on we you be Lisa and Martin, results Officer fiscal Executive

would I safe started, guidance get to I'm remind you're company's we Before assumptions. Management including the of like forward-looking harbor sure you and underlying statements, which language, may familiar with. make

expressions. are that materially. plan, These are based All Forward-looking but not uncertainties statements assumptions believe, to, on current words will, expectations statements include, could of actual XXXX. to estimate containing XX, cause risks and today, should, March to and expect, other forward-looking the may, differ as statements results statements limited some subject are and

a the SEC. risks For with our related business, see further to filings our of discussion

This to on measures, in adjusted earnings these furnished Reconciliations to are and SEC the such measures GAAP the financial call to contain EBITDA. non-GAAP included most release as our comparable will website. available the non-GAAP measures

turn that, to With will the Lisa. I over call

Lisa Harper

Thanks, a Paula. for discussion you and Good for year afternoon, results. everyone, joining of quarter us and thank full our fourth

reignite the in has Despite long-term environment organization, to We've time. with growth. with changes parts a I'd the believe team a dedication elevated the all navigated Torrid like that made essential accomplished and a challenges inventory of begin, of thank decreased customer higher products deal compelling year retail in new to in new exciting customers Before and been many discretionary have customer providing a promotional levels we've I our the of profitable for I short their leadership great spend. a in experience. team this, resulting

us to And in to as Torrid Mark happy wealth Operational have served expertise back Mark of that, both of the as rejoin Officer we to excited Chief to the return Topic brings Chief announce and Officer. a He in Mizicko XXXX. previously team. he Planning and retailing served are prior as of Commercial him Torrid the Torrid. and Chief also experience I'm very of Hot Officer

margin design, believe will aspects Mark in our Vivian delivering on be that Alhorn, a functions and expertise on Munoz planning well planning, for my working the product marketing, marketing inventory and our planning focusing best we buying very things marketing customers. all focused in Marketing sales on leading e-commerce, as Essentially as that Officer e-commerce all for involvement strong as team as with inventory have Vivian's leadership Liz product of well drive and optimization, e-commerce Mark's product company, we Chief activities. selection of on the and with focused

in our performance. events, at off later the and We quarter Customers sales quarter. upper responded to Friday range. into moving taking end of Cyber Now fourth our to guidance the our Black Monday pressure favorably the our delivered cash net

$XX of the gross enabled margin Our in stabilize to gross third significantly of of quarter the margin us to EBITDA fourth margins exceed began million. improvement gross This quarter. an as the upper in sequential declined guidance, than the lower end delivering adjusted rate our

growth. Mizicko organization's primary Commercial Resources Legal have Officer and Human promoted Financial in Chief Officer. Officer; on focus Chief as brought Alhorn Chief and Technology sustainable Our Chief Zeterberg, to brought Operating Officer was Officer; Officer; Tim to we Martin, now Vivian we for Marketing Mark Officer, 'XX Chief Bridgett the and on our Han We our long-term order focus reignite Chief Park, Chief on enhancing

be retail our instrumental private These driving experience they will teams initiatives. from alignment of into and companies, wealth in leaders have and bringing public a our and new and consumer-facing strategic

a across experience invested to technology in will the enable with customers provide also us new moving that seamless forward. more business We

us In our the year. product improved distribution allows increased faster deliver ever our to center, we customers much than put in to technology before, that place and over new capacity last has

new Our integration the an the experience improved provides system organization. ERP and on website enhanced foundation the shopping data for across

inventory entering and demand product, prioritized adequate we Within inventory of with to with goal and environment. support rightsizing the our the XXXX levels

these we efforts, with more coming solely up receipts. compared early move prior and these to the year, year from successful were units promotional be to to inventory and only with year-over-year Although basics had X% last we spring increase ended year, the in

fashion the categories, know the in We that and X% these were inventory new year from forward anticipation demand of levels for customer Normalizing and collaboration most this to we down to other customer pieces drives We Betsey consistently some base. frequency delivered refined product and with her drove of collections Studio relaunch our and with time. representing we colors efficient that seen successful our focus prior more new year and the collection, demand. testing of have on delivering relaunch loyal Johnson a

a our laying and the success active that XXXX Overall, critical up made of We expansion. to on in our through our our customers to new for allowed year efforts store were set lapsed shifted year acquisition. this and customers customer brand's bringing through customer marketing transformation we groundwork retention, We channel. attract file brand focus file future the new finally, deliver our was continued clusters we changes this to growth. believe customer expanding toward back efforts learnings These year. us and new the And lapsed into reaffirmed our us reengagement past customer increase and for an of commitment

expand look relationships. footprint delivering XXXX, continue in ahead file customer we growth, exciting our our enhance closet we driving to need store customer As to to every merchandise fill and will our

file. our areas key to footprint our mind, acquire growing these we customers brand and in investing keep the optimizing expand With into in and new will store customer

they primary remain our and new customer is channel. base Our profitable, acquisition store

the customers first in these customers of significant customers year net the newly drive is spend acquired New first of that than XX% stores year. higher web sales acquired approximately in and from web their

with our connection and brand our product with a Customers us stores. by interacting developed in

stores committed her We customers we a and frequency that proven this our as new between engagement innovative compelling understand bringing by the products We XX customer in increase believe are competitive new personalized to advantage a ability XX where loyalty. determined for provide will and is XXXX and purchases. experience to stores open increase business. into of loyalty to stores We our plan with our are and

categories products with interest in generated In XXXX, build this we on The plan products multiple on to across and we brand. we introduced throughout feedback her steady interest, stream and new of her new engagement customer positive peak launching year. the a will the increase

are customer improving spend focused offer our of marketing promotional and engage a plan consistent frequency. of flow to to terms strategies, We and cadence. drive In events we our smaller, more on promotional exciting

redesigning reliance this, of every will toward cash from part a quarterly large on events throughout and are we year. smaller This As at our reduce promotion change to quarter. event the events of toward our cash the shorter end

exceptional know operational for on will position macro lot We industry growth allow experience. unmatched that team well key we our control. While in the us about customers I experience, driving there to and success the in customer environment, a areas of will in product the as us store customer we believe improvements are as that on delivering am productive enhancing see fitting what to can to truly provide and customer with will laser-focused business, such product. the life-changing discussion and our drive remain world-class continue file the thrilled our that retail products as made we focus we've is

With call over and that, I'll Tim, the more who quarterly will turn detailed financials. annual to provide

Tim Martin

good Thank of afternoon you, all Lisa, and you. to

changes us highlighting deliver policy value the you made the I'd will operational improved while uncertainties would navigating we dealt past We focused seen all believe much increase have like that what accounting recognize to and strategic release. this our through I like the the we to and that team changes change the Torrid I today's health for how changes to can they've on year. business, begin, we controlling press allow by shareholder implemented with I begin in that associated growth. foundational of they with have long-term Before and may accomplished control.

reclassification will quarter funds all record as PLCC be a the in private change voluntary accounting to has of the of enhance policy remarks. In periods related prepared we We the of PLCC our our it using retrospectively because reduction Historically, of net PLCC fiscal discussed to recognition financial the applied metrics those and classification regarding with net and will provide in expenses. the made recorded of our policy, funds. a net comparability industry. XXXX, impacted. Under we we the greater metrics funds preferable to our reported industry This peers performance sales sales into sales, label fourth is statements believe new of SG&A credit many card all transparency been the in in today's

now and pressure event will off provide quarter shop followed Net were Black sales the declined last quarter took million eager cash X.X%. came sales in financial compared with our events, customers of the outlook. Friday to doing We had to our the Cyber our by $XXX detailed year. our at results. a I in $XXX results discussion the fourth Starting Comparable the million in to a strong quarter start quarter. Monday later as which Torrid

$XXX million by $XX million of XX primarily net XX.X% the point and of in for fourth was net decline compared fourth by profit offset partially PLCC or basis the or last inflationary promotional the Gross events quarter funds. higher sales to costs, higher was sales XX.X% year. The of quarter driven

in million the administrative in the million $XX quarter expenses quarter and to general for year. Selling, fourth $XX the were prior compared

of agreements percentage XX.X% the of disposal miscellaneous higher other basis increase expenses onetime points compared primarily items. a driven by and to of from The last assets related to to from employee sales, was and year. increased fourth SG&A separation wages XXX XX.X% of quarter As

our items approximately points that XX severance, assets. with is which to our XX add-back and unusual points basis basis to EBITDA points of related to in should increase related the basis I is note XXX of adjusted disposal related

SG&A focused controllables increase leveraging and We sales forward. going on continue to be see the volume we as controlling

Marketing compared quarter expenses $XX million to in million at the $XX in year. came last

a last at percentage loss the per compared fourth As $X or $X.XX per year. million a flat in for of X.X% compared a was to last million to sales, quarter or the share the expense $XX loss relatively period year a Net $X.XX share loss for of same of loss X.X% year. of quarter marketing last of net was

share. comparison did We any net net for fourth million the of income quarter adjustments But or adjusted was per $X.XX XXXX. purchases, last $XX year to have not in income

$XX at measures, manage believe of to came million use Adjusted quarter guidance net sales. In we we that million in above X.X% year to measure sales addition X.X% our and important is or EBITDA that compared the last evaluate $XX an business. to range or GAAP the adjusted EBITDA our in of fourth of net

results. Now turning to fiscal XXXX our

$X.XX year, compared year. were sales down the billion down $X.XX were billion sales For full and X% comparable net last to to last year, X.X% to

increase we average lower transactions saw we our in that values Although sales. and delivered units sold, an impacted total order

Our in year. loyalty The size by customer XXXX net to fiscal X.X customers in loyalty they to per X.X from total customers X% customer XXXX XX% X% base represented million was of XXXX our in sales. million customers our our and last sales customer down program, total program grew as grew million X.X of to

to industry-leading compelling and return to an return continue believe as in XX% by quality anchored rate product of the a we our delivering be fit evidenced assortment on our rate. fit, We delivers speaks focused and which

valuable In and in this a XX% growth and see of label private continue new mentioned the card. we And our year and came to over label tender positive agreement program. customers card XXXX, share the our coming from new most shopping from we reception the saw to customers brand. higher renegotiated prior As rates private credit calls, sales credit VIP

noncredit more fourth two stores of X the Torrid in our credit year. retention Our this XX six Xx XXXX, Torrid drive we we private card stores. card and opened six than We customers Torrid past credit has XX Torrid stores cardholders evidenced and instrumental and and label more closed total frequency than our stores spending holders stores in We opened as a in closed quarter, Curve stores. helping been from fiscal Curve by and

we be acquisition through primary both are bring found acquired customers to shop to customers and year. the continue rate channel behavior contributing e-commerce stores be to our brand, more into customers. Our XX% to mix last This and our strengthens likely in in the stores our delivered to XX% XXXX a compared omnichannel and channels penetration channel

more X.Xx a brand. shop single across over than customers sales omnichannel of our drove channel half Our also customer the and total

sales was of sales XX.X% in compared million of was $XXX 'XX million XXXX. XX.X% net to Adjusted or EBITDA or million or $XXX $XXX net sales. XX.X% in profit fiscal Gross net of

clear adjusted profitability. EBITDA to were referred the industry to Although what our ability retail and as has our we environment, we promotional in difficult delivered order double-digit a and macro to margins, drive of inventory strength still to speaks brand which the its

the net million to share or a for was $X.XX period of the same per compared income year year. Net share $XX million, $XX $X.XX loss per for last or

or for purposes, comparison $X.XX income fiscal million For per share. adjusted was net XXXX $XXX

Turning sheet. balance to the

of of the the credit and end end of $XXX $XXX cash liquidity was equivalents cash Our year, at million. $XX was at debt Total to of fiscal million the totaled XXXX. $XXX.X Total million. million, at compared year available at including the end XXXX end the the

debt year-end. adjusted net X.Xx Our was EBITDA to at

end Inventory year. of $XXX increase early was $XXX is to of the longer receipts life. have increase prior X% in spring basics, quarter the the which at a an million, from compared The the million and

very in a quality basics, inventory our to inventory of X% position as are XXXX. the spring last levels with putting and We good were year, and we the excluding us down pleased enter our

for outlook the to Turning the year.

outlook trends. business understanding on our and the Our of is based environment current

uncertain we impact beyond XXXX to our material in an have However, projections. changes to control environment operate macro our continue in may an and

be anticipate week towards full the the For between in owing net XX-week growth and will we half XXXX, expect fourth We to a billion. is sales billion year, net XXrd period to year new of secured that second the be the $X.XXX which and stores primarily $X.XXX the for reporting quarter.

million. between $XXX We be estimate and million to $XXX that adjusted EBITDA

incentive expect margin increase Although stabilization slight gross to in full we compensation primarily see due SG&A year, plans. funding for the a are to we

$XXX be million. quarter we between to expect the of and XXXX, million In first net $XXX sales

most through $XX million Our our on guidance incorporates $XX as quarters EBITDA environment. comparison quarter recent to pressure same we gross that we've estimate trends tighter This of continued as deceleration demand comped between navigate assumes in margin we current adjusted seen first the be We a last the in the and the rate to million. year.

XX to projected 'XX million store new and be XX million openings. $XX fiscal Capital and expenditures are between investments improvements reflecting and $XX infrastructure for in between and

the XXXX with and stores in are in the Our late fourth the the in new stores third quarter. quarter planned opening fourth majority of

planning close stores also year. five to are We this

well we profitable our double-digit closing, delivered number of navigated In for a still challenges year customer income net a adjusted growth in EBITDA as and file. the as margins

our we into positive year the implemented As growth position that will for ahead changes to look past XXXX, deliver in believe the shareholders. long-term us we

have growth can focused quality we productive remain will results we customer product. We control, emphasizing that file customer on a experience, and ensuring the the best of

turn for With that, questions. the operator to I now will the over call

Operator

is Lorraine Bank question Please first with Our Instructions] [Operator from proceed. of America. Hutchinson

Lorraine Hutchinson

you're Have reaction you able to on I making like? wanted customer follow Torrid afternoon. the what's test look these? been And to changes the up Good Thanks. to cash.

Lisa Harper

our testing in So quarter. -- of our we're shift in tested first we've the midst the first just

of the the rate of the So redemption another end and we year, the second the move shipping redemption time about, and quarter. had ago, will that earlier ended, quarter. lot rate would I This towards normally, guess, have toward quarter. towards A have of XX redemption happen we'll an it the days end period one we've the end for of cash

better how that we forward. moving we'll indication So have a see of

testing in of the bit gross the a which on I last since And margin lot accumulated the promotional the very types much kind hampered at large with to we company, historical have many terms Lorraine, that last the softened the inventory by we've over return I the learnings then has been Torrid of of and and healthy for of promote strength positive say that program, other position had past these the compel a how a year that. arrived would Cash customer. stories But customer at more year. of of positive we're offsetting in

I'm the we're just Mark but elements. management very and in bringing one of an as planning experience promotional extensive into has amount inventory so not excited about also the reasons bringing margin optimization through of -- he company these And and

with the that the on really what it So, over but accretive very testing of period margin has stage. come done smaller more augmenting program to as this, in been this is other activity the saw we've switching risk it also softening year, by at mitigated we fix this point that to and time promotional time

Lorraine Hutchinson

gross transportation front, product think And margin you the any flow you. expect year. cost on a that Thank will that about can inflation bit you you this speak through the then savings and

Lisa Harper

Sure.

we recovery feel will we that that in some gross do So and have year. plans this margin have

some of and moving to are cost to an seeing expanding. as see towards we we're year, still growing starting and we're freight. inbound the to we improvement to is in starting see first But is freight delivery freight product, the we'll back continue been As have in see customer on outbound that some and and improvement also related

So it of level some offsets that.

we costing. some But are seeing improvement in

forward. We our of new are goods integrated of year. And of new sourcing we and new quality are terms country being also sourcing product that also development helping we into our able origins his the that in vendor as strategies bases brought to strategies a be have move cost expect of and those and are in SVP last

Lorraine Hutchinson

Thank you.

Lisa Harper

you. Thank

Operator

next Group. from Please Telsey proceed. Dana question Advisory is with Our Telsey

Dana Telsey

consumer? to your on give to Good from an went making. performing fourth you expectations? the And how Studio how update the Thank you rate? you. see relative seen define through And do forward? Studio was lastly, the the the measures you're you health you as the uptick unpack And slightly, afternoon, margins quarter, through us think line, SG&A just nice how you've cadence year Lisa, then the you with of that And how of everyone. the the if that would what exit Can the the going it's of progress line,

Lisa Harper

for product Studio five assortment testing and fabrics been We're pleased that we've with of that to how the Dana. core [funky], become we you, there part of core really other but performing. that will Thank four have core The is is line. also fabrication

call We forward line, and I adding would are that denim some denim, polished move expanding we or what studio streetwear. as studio in

see happy. idea any So drives she We has frequency, and our need a very exciting. that to that It need absolutely drives it customer. conversion very new compelling introduce is time that's we -- a so to

We in in and have a addition to learning that's that's now, blend, doing that. it woman and well

opportunity we So great more move as launch and forward.

quite about Can your not second I'm fourth question quarter. sure the you?

Dana Telsey

The cadence how update consumer the seeing any quarter health the ended? quarter, Or you consumer the are how is? the as of on of the

Lisa Harper

Sure.

weeks, of a was what be recovery the return beginning very some quarter had could there's stores, to couple about really So and -- of And positive of in we've seen conversations It But different become in has of and that shoots some over to exciting. fourth which we this but lot that. momentum also seasonality of saw an we in at traffic. the stores. terms last quarter, customers' is back improvement choppy lots the nice the the store green

our with customer customer in combined dressing getting stores to That, room. acquisition the and the focus on that

customers in improvement we're customer room, what And nice conversion seeing with rate the dressing a getting of stores the traffic, doubles in to room. tracking get rates focus some conjunction in there. you addressing the conversion So almost and -- the the

in on Again, positive stores customer a very customer stores on some we're well nice from conversion. from store in we've additional focuses some both the little and so that, done choppy reaction really that the shoots bit return. that the journey, acquisition positive And as as onboarding and training seeing

have of the shift we seeing at we of seeing bit having actually, have what time. we're are more back we some we're -- moving Again, had people And more I omni for a look baked softness scenarios of as front year a now an online. in an online, think any that of impact with, really a bit a lot one and at think macro customer, little of most it as lot year a and could this again, the we on pieces likely discussed

and controllables managing says, really this so aggressive And environment. as controlling nimble being Tim a and the multi-tier and

of X this really So year, I'm things side. on thinking done with for we're the in recovery about the merch happy some looking that steps seeing, margin margin

then I'll Tim to always tell let And talk me about to SG&A, who SG&A. love about you

Tim Martin

I perspective, going we deleveraging SG&A going can return we're compensation, the to year full see think of everything an we from of a over to although on do incentive just slight a to are because that mitigate time. Dana, basis,

half that as be front by you'll I see velocity the will half. year that of back the start better itself the half the to expect improve think sales we in than the back

a and we We the programs in distribution source around that. we drive on But lot and procurement, goal in non-merch retailers that way number. how activity down about around of is we run costing wage controllables other leverage and to number overall that as how the and a seeing that lot a to are same controlling like talked how we find centers terms things drive of efficiency my our understanding about stores things still pressure focusing staff of staff talking our in are stores, we

Dana Telsey

it. you. Got Thank

Lisa Harper

Dana. Thanks

Operator

Our proceed. next question is Baird. from Mark Please Altschwager with

Mark Altschwager

versus also out from openings the there? of per on just drivers you then with you any bit as the more And Thank guess, strengthening spend you'd the your revenues, key taking Can about week little mentioned? the revenue color and guidance, imply customer you aside for giving as confidence And respect on first, year. trend underlying growth move my I customer? talk we XXrd a afternoon. the to it store does a on call you Good what's expectations question. the timing through the

Tim Martin

And excited The we're new getting over year. the that have the think more about second we the contribute by year. what then way, course new will easier to we of an in we're that product the opportunity. growth see be of store we're going and launches, I So half comparisons, sort expect do of more the seeing to that we're receptivity and will

a all of combination it's So of things. those

major easier comparison aspects it. one the the being of of So

Mark Altschwager

for Okay, like know thank looking the were really the was you about the perhaps margin clearing on were a your better fourth on results what the upside better out? up a there's, tactics better XXXX, then drove beat but you. maybe the trend some learning promotional for And it expected the quarter and And inventory bit the to curious any of call quarter, than little from test and than I set we gross in takeaways fourth for quarter? or if would doing plans. you new you that that you're seems

Lisa Harper

had think in less there less clear - there to pressure was was quarter, number than one. I that third it been

- because had the as mitigated comments. receipts receipts at mentioned year. spring in our the We So body early end the of really the and we of

are movement also starting We to see in some margin positive efforts. gross

are gross starting of in in place and put we leverage strategies some some promotional see that the have margin. marketing So

delta we I anticipated. gross that so, still a just slightly the and a of making but progress by year-over-year think And - than better less rate basis. And quarterly we're margin was on better smidge,

move So able some some internally the forward. have the excess some improvement I that some when as business that at strategies we think nice that's us are employ for to was the on we level margin actually - didn't see is we to of our inventory overwhelming of - and positive news

Mark Altschwager

all detail. thank for you Great, the

Lisa Harper

you. Thank

Operator

Please question is with Tarlowe proceed. from next Our Corey Jefferies.

Corey Tarlowe

and thanks my taking afternoon questions. for good Hi,

I'm you a to doors that on Torrid really as have has obviously worked a customer I from into Lisa, the some outside drive the or serve curious new that last product But to to ask acquisition, wanted stores clearly what way just customers quarter, perspective helped customers. of great marketing has acquire new So new you brand? emphasized over

Lisa Harper

the So, year we to of have at we and big bringing successes the file customers last was the brand. had lapsed look them who total one customer back

last but with was And really growth for much didn't this focus apply digital that build year, a year, then things in on also as so switched categories, this as us all we've new to some well. customer just of that and on to new reactivation and early a the scenario. customer strategic we're the - clear retention We've seeing agency direction a just throughout to area nice file marketing customers frequency as very

customer experience that high And we're said what has and new retention the for years your to right room feeling conversion her is the of really point worked terms in dressing what reinforcing many in this like path has omni very the business customer in stores call, as doing we're - on in over incredible she that. an But the the dedication the has with into value customer, and that in customer lifetime a rates. we

frequency is most of underlying the the experience. is philosophy effective, that store And organization. and for fundamentally omni, most Definitely this business productive us the build new opportunity of this to acquire through customers, retain them

data is ever in on the stores experience in the highest the our environment. I've retail Our all the seen of customer -

get an in we're moving focused environment, regular the customer they that are that spend in by and frequency move there. opportunity strategy to And getting as forward. omni an double customer. And the strategy long quickly omni more to is that build to And her her really conversion store dressing rate the do room the then because marketing

So simply that's story. the

customer And there's the more by robust on with in and of all in moving the primarily store. consideration, marketing much journey a XXX has that funnel from I door, awareness focus I of starts top think that - walk that moving was a the when degree to the focus in

accelerate this more move into and year opening as will start years. we following we we'll So stores that

business a for that We have very all need sound of we indicate, the strategy us this data that forward. move is we as to

thoughtfully, very to build but we mentality we've react question, a brand do this, method this about opportunity the strategically growth to that historically the to reigniting Corey. going and can the this the as into brand. big and we're answer a feeling of we was go your runway that And with drive excited I'm by the used test That

I wanted So - to what you answered hear. hope I

Corey Tarlowe

now about that more talked probably the there's much, helpful. very control you focus. the Tim, little at that of your thank there's a now recognize than some I very we've have what control and you actions take, to of need about a control think you how you controlling those COVID, lot bit know And that, And - couldn't aspects your that's that there Yes, you in you do just, controllables. probably in you is I then onset has priority can about been as that list? prioritizing some time. those about you quite think your think on and ranking But

Tim Martin

Yes.

look our biggest we and sell the to biggest growth buck profitability buy, going this the best business. how bank and and be of be product. sort rank - that's inventory and through the the at to managing always of to always we think That's going I contribution for

we're our think aspect I how going store into overall, look we We're to going staff associates. SG&A. our to at we're stores, within every dig also how compensating

to we How SG&A the in and possible can leverage be efficient distribution how - center possible. efficiencies can drive volume we as lowest the sales

pressure at. pretty or doing we're anything store the going stores, how how buy taking is So, driving distribution organization inflationary causing and we're in at supplies. cost a bags Basically, that we're take much in a look everything, of look we to everything cost

Corey Tarlowe

and you Great much that's very best luck. very of helpful. Thank

Tim Martin

Sure.

Lisa Harper

Thanks.

Operator

next with from Please Jonna Kim proceed. question TD Cowen. Our is

Jonna Kim

my taking for you Thank question.

environment and levels? also, performance think store Just store And about continue stores? the open to you do as stores, curious you productivity how any have you're historical the stores you. you you noticed versus And terms difference open Thank new your assuming promotional of in continue ramp new to as what guidance? of in your in

Lisa Harper

at we a we that due the we so the aggressive this of were company. environment realized Right, as year, inventory off scenario promotional considered very had we to coming

taking that we from the don't story, but can we more customer out focused and with we're from rug to also approach. We measured we on compelling time smaller under just think So, forward. a events margin-rich over the pull move a have that as events be we're mitigating promotional

control will promotional as And of then environment course, that again, management inventory help well.

in things. all last opened years. don't of we So - we're on focused stores lot a haven't of We those, the have four

are healthy. we The performance very, and we're opening a lot stores. seeing to very So new are COVID stores been we really haven't the that of opening now, that stores for

ramps, basically a don't ramp. we Our have

our very we've stores. very, opened, beating is or they of hitting new ramp are new fast the their - forma. that number limited pro of stores on Our And

So we're happy with that.

Jonna Kim

thank it, Got you.

Lisa Harper

you. Thank

Operator

with from Blair. Our is next proceed. William Carden question Please Don

Dylan Carden

to that Thanks. I just there's promotional a a after mean, gross I of margin that you I stabilizing did the of understand promotional the but like standpoint? used you? kind of put back customer two kind on risk one business for mean from a years, the what's I business more that, that into sign-up promo, on guess fully lot margin a to

Lisa Harper

be don't inventory What we're to having back we to I that say, this not, are because pulling an year, amounted and would back surgical is said clear. So have being be we're highly that and promotional. we I more, pulling issue

at analytics our that's The to move that we product, going better we inventory choices channel, other thing how have to customer is how rank based by using for make us fundamentally by we and behavior. investment disposal the difference on as product all we make a really forward

the surgical and overall combined of assortment inventory the forward. combination So cadence investment, with moving more promotional we inventory, channel of much the quality is the of how the a see

we we we'll and a then recovery some in next So of time year, level year have due historical to merch should this back be think margins.

back on as the appropriately year, back than different a telling not managing we're get but are well. channel, had us one by inventory to we to which we - and allows it's pull in promotional So telling messages promotional also trying been it story all more

Dylan Carden

So gross for inflation, inflation? relates the guidance kind be the would margin it input around offset the cost of to then as year language

Lisa Harper

I sorry, that you to ask could want I'm - again? don't

Dylan Carden

thought more of so is margin. or commentary gross gross there stabilization the less I so margin a - that is Yes,

back I so, would pulling to flow you if guess on give expect to wouldn't promotional gross margin? be And there why through the are even more why some it extent you - activity,

Lisa Harper

we're promotional comes make year. just thinking quickly about are think don't There back that The and we're question recovery is now that doing two-year year, margin. all period. through that We the one it flow gross We're is going through. we're we a get that highly mitigating to not up to sure - - over against the a in we're

variable is to I say, and in related And we economic - also, factored would situation. uncertain have then an - a

Does what some, sense? economic balance we've issues. and between so, some macro - is against invested, a environment recovery And make hedge an there that margin guess, I

Dylan Carden

the I just So language think margin? gross gross margin, around the yes, I misunderstood commentary for

Lisa Harper

this expands - margin year. Gross

Tim Martin

gross expect do margins. in expansion we Yes,

Dylan Carden

And no - okay. question was more I'll actual take that offline. lines. And my along the

you is this out this thinking How of increasing So year. kind Is you it last sounds about like kind the big recovery the of are of year, architecture newness? coming of frequency year, of yes? a are like inventory the that of piece sort

Lisa Harper

The to level changing the promotions. that the of it that of base it. years. and similar we're rhythm might it soften will buying breadth inventory we're how the of different shifted. is, slightly But mitigate newness be And in of newness not We're how general, help promoting business. The and changing and we're and is just depth the prior level

are drives So - ideas, we new that, this studios, but know new of those just and fashion, things. what I'm customer product, types - new

have - of the things to as really to And the closet. omni. so think ideas customer that two new launch of can to just - the ideas calendar customer, new a core this she to for so, her then we provide to the And needs drive ideas acquisition Because for always the fashion, but well. expansion, which store is everything that customer, not we and we're year business, buy we are there related about introducing

so, as - focused that forward. those well as we move on And we

Dylan Carden

skewed from and far And I standpoint - a correct remembering occasion? less then last that basics more towards sort as they're mix year, in of as am

Lisa Harper

everything that we last The left as we're of product. of split was the basics year. life we when shelf to -- around. just not certainly, out didn't Well inventory aggressive longer Well, approach we weren't overbought because was

And clothes and possible started so, did. we as basics, we through as the prior as have made fresh any year plain we've that sure we possible in a and we that were as time and work just year season to bit more this the

inventory, fall Our because OP really early holiday inventory - challenges of in in is chain the down spring, is related receipts substantially. on-time the The to supply receipts are past. increase

how - taking I were liability last we - the - the without what am excess get year with to into this happy inventory So through able we're year. happy

Dylan Carden

very you much. thank Right,

Lisa Harper

Okay thanks.

Operator

proceed. from is question with Sachs. next Please Our Brooke Roach Goldman

Brooke Roach

Good and to the marketing reinvest horizon for changes promotional that My you on our question into the thank to the do any you improve And outlook need taking marketing much recapture year. spend customer fuel question. the the to some you Can afternoon the engagement? for growth? of continue additional is so on to you to further business' see talk

Lisa Harper

more strategy. One Sure, We tell we've make your is hey Brooke, question. new the strategy. a digital a you marketing and it thank funds agencies. for you that optimize that we traditional would deploy What approach investments. where the is have within I engaged They two

As that to focused much our we on we move that. in general will was, start we previous retail is as invest in through productivity see with more the than agency new agency

to forward. we agency continue We are should invest, and us also invest we again, like minimal, the how giving but very we testing TV, with a will very to things different connected small, visibility move as

with become just accelerating but funnel, the on level drive to top acquisition in omni. and to think move there marketing they more basis, that we investment marketing through higher store not I we and start will customers convert the also for stores, marketing of as supplement a a that customer also so as can actually openings, multiyear we at

very to their nice marketing we I'm with with progress that and there. business, - strategic happy So approach seeing pleased have and I we're the in team the I'm think very place

and a year-end, we that a level to to are acquisition invest through to once in basis, digital. we investment, will productivity, to anticipating So of customer see we support the productivity. And higher on particularly longer-term continue stores both

Brooke Roach

ask you the debt cash plans I you for Thank potential to priorities your use, more any speak for just if Tim, year? repayment this one including and could And you. much. very Thank level can for

Tim Martin

that and any to store be about. have investment. on and going right now focused the best our on excess both No, customers to is It of return plan to business - generation, growth growing seems we of the source talked that new cash be we

liquidity of we evolves So of And from the as we'll that's year, as are, the the through perspective. focus business but course very number the one we're where today. see comfortable a

after very back cash best use with to manage with growth. business. that, beyond feel We're on focused do what we've need And come comfortable generation. we'll we've grow we the to got highest then And flow that we to this like, enough and

Brooke Roach

will Thank pass you. I it on.

Lisa Harper

Thank you.

Tim Martin

Thanks.

Operator

Straton Morgan proceed. Alex Please Stanley. from Our next question with is

Alex Straton

you number unusual cash want for understand it year-over-year. SG&A, to the lowest a then bit the looks Thanks. my might going that into like Thanks feel this at understand, trying how the that question I'm to and first seems and moment? was a on million of bit like the levels about cadence quite right from cash levels for to question, to at of think million how Two $X $X much quarter the you And about taking last are today. second, I how and be XXXX? related year It kind that of you, down but normal is me

Tim Martin

as that off. with We're year holiday and last seasonal that question come as a we of we cash the levels. thing also - the paid second with first. your answer is very comfortable It came inventory we I'll through we Sure. up out built

So I'm that mentioned to flow liquidity not flow cash more focus I as the growth we'll incremental to investment business cash as things have than and at XXXX about about. we all or generate talked throughout on concerned ample flow we'll drive an amount primarily on and the we a vehicle liquidity store cash of

in activities. And SG&A out write-off associated were with quarter, our we my of then some SG&A utilizing a in the our to had to of some adjusted million space. included address about severance in technology we $X commentary From related kind tried $X million I non-cash Those we EBITDA. backed perspective were had in longer assets for close no to related fourth that

which So I impact quantities to items. severance in basis SG&A you our unusual of due points for the my the and of those script assets. of the the due disposal point XX was to increase XX of basis was points basis - did are that breakout looks

Alex Straton

thanks. Great,

Operator

to turn for like I would conference of back comments. over the to question-and-answer closing the session. end reached have We management our

Lisa Harper

to for our progresses. as Thanks much the sharing and We in progress the your today with company. you year so joining interest forward us look

Tim Martin

Thank you, everyone.

Operator

This today's conclude will conference.

participation. for your thank at disconnect lines You your may time this and you

Torrid (CURV) 23 Mar 232022 Q4 Earnings call transcript