Earnings call transcript Q1 2023

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Operator

Greetings, and welcome to Torrid Holdings Inc.

First Quarter Fiscal 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference call is being recorded.

pleasure of your Torrid my Chief Chinwe now Officer Accounting Holdings. is to host introduce Abaelu, It Thank you.

You may begin.

Chinwe Abaelu

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

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

statements Forward-looking should, statements meaning. containing will, plan, and expect, estimate may terms may, anticipate, believe, include, words but of to, words limited the in other similar are not

based forward-looking actual today, These X, XXXX. of statements expectations uncertainties All could as subject and are and materially. assumptions June to risks differ that are on statements current to results cause

to measures For related the the EBITDA. the non-GAAP most release to with see filings will our call and non-GAAP This SEC GAAP in on furnished SEC. measures, risks discussion these measures to available such comparable as financial of Reconciliations are our adjusted website. included business, further to the earnings contain our

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

Lisa Harper

our and first afternoon, Good everyone, you discussion thank quarter performance. for for of Chinwe. Thanks, us joining a

marketing. the Mark focus developments key me provide Joining and today call of and Mark in Commercial on the recent merchandising areas will Chief is an overview Mizicko, Officer. our

our will financial planning as excited first results, of quarter her. I'm financial and work retail leadership an where extensive as She to well for Dempsey, fiscal and publicly XXXX. and our companies roles experience in she is has the guidance the on in CFO. Interim Paula of with overview senior Also, provide Paula our with and finance held held me remainder closely has sector, the call analysis

expectations, headwinds prudently results we by the economic despite the delivered During the with adjusted business weather. managed EBITDA our created quarter, and and our in line landscape

was indicators strategy traffic good and positive effectiveness loyalty. While of momentum unit demonstrate of These and volatile both we enhance conversion online, the experienced and customer retail. engagement our in in-store to average and terms challenging

Our solid cost and to profits commitment operational prudent enabled management to efficiency traffic lower us trends. generate despite operating

made this back we quarter, on inconsistent decision the the pull given During certain to strategic traffic pattern. promotions

to levels the Our same progress pleased focus we be down continued inventory were year. in the the levels compared quarter first with with to X% ended inventory We made. quarter and last the our aligning we period

to inventory approximately Excluding inventory of down XX of XXXX. million X% was compared QX our early receipts, fiscal

them environment. to committed optimal levels, adopting to a the dynamic adapt diligently and to maintaining approach ever are inventory changing We monitoring

remained trying to for period have investments we challenging During predict of in this customer long-term. the our make best steadfast commitment to behavior, right the

continue our strengthening invest customer enhance store and footprint. will to customer drive product includes evolving position. file, expanding our market growth offerings, preferences, to We in our that cater optimizing This our strategies and

improve as allocation, to brand. leadership Officer, Commercial this as offering, the leads Mark we of I'm of return and our merchandise a Mark and efforts of As the merchandising, role Chief Mizicko in and leadership vision enhance Torrid our part planning his In the and confident e-commerce. product team. member announced marketing for

Our to our align customers needs offerings of focus to our consistent marketing messaging to and meet our our to the clients. optimize compelling with and assortment is create our

driven revitalize that customers with in by deeper of loyalty We're the loyalty. insights, promotional a our leveraging resonate cadence our We our and including ensuring Torrid engagement process customer evolving prioritized our data level. activity program. our our to cash on events have We and intend offers promotional

engagement, fostering initiatives, customers. of market our we we customer also will strengthen and undergo most community patrons program Through rewarding position our and Our that loyalty a stronger significant with will confident dedicated build these valued relationships on sense enhancing are lasting a our focusing (ph). transformation long

our to for to the committed open and stores remain XX we on stores to track brick-and-mortar XX are year. finally, And

strengthen and in Our recognition the as as her customer stores our recommendations play customer and This from We with perfect a for resulting with see, our a initiate strong by crucial know capabilities, brand. experience that with building us, the sales foster our relationship us try customer She that on provides store through products finds to she associates. personalized receive to can role a file. well a brand her online tangible our her in omnichannel. shopping increasing Torrid and trust visiting once bond fit, touch extends

brand, In growth through the than for driving of customer to cater account creates digital strengthening customer quarter, ability to sales. our preferences ultimately the half shopping for net business total first and sales convenient and customers' continued both seamless journey, and experiences file relationship online The to more expansion. physical a our

is priority to an by to offerings services. providing our top Our customers unwavering maintain and dedication unmatched

meeting delivering can their not retain our only the wallet experiences, when may existing customers exceptional solidifying our brand. understand her new expectations, be also further we We exceeding especially of ones but and importance attract constrained. By

and conditions. is streamlining that evolving the adaptable It team, and our efficient we leadership the of company As recognize remains our agile, goal significance our market to ensure processes. the to improving

To structure our expenses align The with to we potential. continue our end, optimize we is edge. strategic maintaining that to competitive our where spending evaluate priorities revenue can while our objective to identify will cost and areas our

remained with In some future. We conclusion, about optimistic our while quarter the first us presented challenges.

focus will ever unwavering the landscape. retail we continue and evolving Our and remains to growth adapt loyalty driving to on store

current the will environment our us to navigate us success strategies and the We through confident enable are run. that in position for long

like have our hard I a I achievements our to who and remarkable of call to Before employees, talented am dedication to the immensely driving behind lead team. force I'd express to work resilience sincere the commitment. and such my Mark, turn dedicated over demonstrated gratitude Their and proud

Mark Mizicko

of be all are for to I'll the as great excited I'm have by then our teams It's we'll few a by the brand. initiatives some Lisa. the quarter. and the highlights back on. discuss of product that of highlighting opportunity we briefly Thanks And start working a

Our better expansion, efficiency to we which planning and our balancing our focused teams and channel promote product margin by merchandising with the gross demand, through and assortment driving in are location. improving customer and on sell-through improvement price product

online see amount and We pricing traction in a have small begun more begun in have specific margin recently our to trends stores. promotional of

that sell-throughs half We strategy. begin our will our part assortment a back balance expansion the better in change to in fulfillment we through expect by targeting and additional realizing store higher online aided margin of

our and In believe significant customer and engage and program marketing journeys, calendar opportunities there through loyalty better and our social promotional marketing, store through of that of events investment, our existing personalized base improved reinvention we are a customer expansion and through value community to for through customer cadence optimization potential lifetime media. fostering of us and

making marketing our a changes and platform begun the improvements expect new marketing ROI. even optimize some that have our seen investment. our running term up us In in investment with to data have will digital allow third and agency with short to We we to further be quarter,

opportunity value Loyalty, both of lifetime customer big as a in a us. is for and terms program

customers testing in journeys of summer store value. the to and We promotions changes and through engagement customer events higher in lifetime our that developing are discounts. engaging lead and are currently stages early the to this begin increased customer will We'll

few to highlights. Turning a first quarter

and opportunities overall many in results for, build to While the have successes the next we for were these we the bright many were business what balance for and this spots not year. year hoping nonetheless of saw upon

successfully these Studio category, four received by both were bottoms In for fabrications. quarter. see By These across apparel driven Workware. four were non-denim categories we and apparel, customer fabrics. jackets of new we launched good were All of and by all expansion for collection very our potential performance well the the

together were increasing and our though general, upside we future edgy as casual In received casual and bright and there our were offering tees. better license dressing, looks put well. see our in than investment graphic casual in dressing offerings In more spots looks more

For from we will and into far as us we prior for neutrals. in the of significant fabrics be investments gauze these such Correcting many from as swung cases, color move forward. tops years in opportunity print and and (ph) in general, too successes sali

we by new business, driven strong which quarter in as Curve categories saw the a swim, In from as was ups, cover strength swim well and in beachwear prints. apparel novelty and

assortment further optimize next opportunity fashion have pricing. year in swim season evolve our We reflow to to early and swim deliveries to the our our into

year active, we We'll stretch all outdoor by woven, throughout assortment in continue saw across and and Performance In our next. that active Soft silhouette. into was this outdoor Jersey ripstop driven into Super expansion strong our performance

customer inventory Balancing assortment will on we that at summary, we we demand success. while an the the do our and overall, will back build businesses to our item fabrics, have with the can fit at aligning level. attribute of better business in strengths allow and both us colors on, In past build across investments

brand that I to back I the strongly our and our believe and be and deliver she at in pleased deserves. Torrid of the expects in potential assortment, Again, very experience and am to customers the community the ability the

with I turn Paula. that, over to And now will call the

Paula Dempsey

forward in and and Mark, holding as to with working Torrid. here capacity. leadership privately spent my Lisa everyone. of the be Interim I to I'm afternoon, I have finance good various companies you, team. look publicly Thank working the roles CFO pleased today and career held

employees. and millions Foundation customers support Torrid and through is aims to an be of our while incredible of donating with fashionable the dollars brand that Torrid our inclusive

update will the followed the for quarter year. the We of of results financial by of a an and discussion begin with rest our detailed for our second outlook

our Let's performance. top line discussing start by

last quarter, the XX%. year, XX.X% through to event the [indiscernible] During slowdown $XXX Cash experienced quarter. to quarter first decreased sales results other Similar starting for million, retailers, compared declined sales midway to quarter, comparable the we $XXX first net the and a in the Torrid traffic same million

our earlier, last average However, with positive year. Lisa to mentioned were price pleased selling we compared

in was in last mitigated quarter on year. product favorable store XX.X% of Moving compared by impact to the partly profit occupancy payroll, of and merchandising mainly to points due margin and XXX factors. profitability. an The decrease Gross inflationary pricing other the first to strategies increase costs. XX.X% was enhanced basis

million for million in first $XX to quarter prior year. in were expenses $XX the compared the SG&A quarter

year. prior sales, our store by of payroll the net XX.X% to The a XX.X% sales to primarily pressures increase markets. SG&A percentage of in driven wage was percentage As due the of compared in was

first in $XX the year. million the compared of last $XX were million expenses Marketing in quarter quarter

primarily of as percentage upper TV year. marketing net in cost The lower advertising. in XX points first quarter a the reduction by As such sales, X.X% was [indiscernible] to to the basis X.X% spending compared decreased driven of marketing last on

bottom Turning line to our performance.

million $XX for Our million or year. $X.XX $XX per period quarter net per same was income of share share for last versus income or the $X.XX net the

GAAP our In addition believe used we measures, and to measure business. that our EBITDA that we to important adjusted is manage an evaluate

above quarter or Adjusted XX.X% the our the in midpoint of of of net EBITDA of or sales XX.X% $XX $XX at million million compared guidance in sales to net XXXX. came first

sheet, quarter. financial maintained our we a In balance of strong the during terms first position

Our stood the million $XX cash the at cash at of quarter. and equivalents end

million. at first of the the available the XXXX. quarter, million the of at Total debt of liquidity quarter the end end Total first $XXX million $XXX was $XXX compared to in including credit quarter was

was X.X times debt end. at Our EBITDA adjusted net quarter to

quarter was the year. compared for period $XXX of to million the last million at end same the Inventory $XXX

to inventory exercise receipt our levels will of sales the our Excluding compared Based year, of with demand around caution declined remainder the the conditions. early of considering prevailing QX, the million to approximately of and continue on X% comfortable we're projected inventory at end for -- inventory fiscal QX XX current XXXX.

with an in six opened we In receipt the event In quarter our we ending five of Torrid while stores. the on stores, simultaneously improvement draw QX, inventory stores will demand, reserve. closing XXX

the for the of to year to within XX be openings estimated XX store stores. are projected Our range

in trends Turning environment, the Giving to that uncertainty we follow the demand expect in macro have quarter. outlook. seen to we the similar the the first quarter second

be million, and For project between the $XXX EBITDA be to million quarter, between million. sales $XX adjusted we $XX $XXX million and to second net and

million. estimate year year, compared between assumes be $XXX For improvement with sales to we our outlook throughout billion be fiscal margin to This XXXX. the $XXX and adjusted the billion the gross EBITDA full $X.XXX and when to our to $X.XXX between million

takes reflecting expenditures Capital XXXX, new $XX The fiscal a openings XX than more for our investments. million outlook million store other prior annual XX to between expectations. macroeconomic environment and $XX account and revised into challenging

we ahead, of about Looking future optimistic our remain the business.

to customer We robust and and a potential. We're we enhance of have expanding both to all domestically internationally continue committed significant the growth channels. and pipeline see merchandise store and our invest experience strategically we innovative across will footprint

and term business efficiencies obstacles, and to presence consumer remains evolving of growth. term strategic our leverage optimize that view initiatives of demand continue drive the positive our to the long as short Despite operational sustainable to we

our term confident are value create our ability for We shareholders. in to long

to And with it turn that, the I operator for over will now questions.

Operator

Thank you.

a will session. We you. Instructions] conducting question-and-answer now be Thank [Operator

Our question Altschwager Mark from with Please first is your Baird. question. with proceed

Mark Altschwager

for my Thank taking you afternoon. Good question.

So trend, top last macro versus company specific change execution pretty big think we or help March spoken some line unpack product in from it a you in perhaps us sounds just like late weather is what trend maybe consumer versus when opportunities?

multiyear the implies maybe back I for versus the And stable when trends at basis. in half a think half the guide first year worse relatedly, then the to slightly looking

trend years of some previously had improving through you initiatives think the room unfolded. the an to some drive that I seen

just you. guide? that us maybe framework So your Thank through new walk with

Lisa Harper

Mark. Hi, Sure.

through So the quarter that had of we the a experienced middle trends in relatively and and May of shift that February half and first we early May. going had behavior. March, traffic improvement that the traffic trends. news is, April we're in actually trends was we positive with June, customer was, situation dramatic The seeing back in In nice into good in into continued

simple it as make as I'll possible.

short the seen in the based considers the we that we've the customer. we've the are moving terms prudent with four months that it with in traffic that first in it's do of forward quarter. the we trends to forecast was And experienced We most that the felt -- on experienced thing volatility trends

starting looks very challenging again. look the quarter. see more first middle It to The good of at good hits we're it the trend quarter beginning a of and traffic

historically And more would of are customer I also of our trends so it say of a terms is seen business. a in what currently bit in our behavior. roller predictive coaster we've

made to take to business. experienced But to our So of as a have the honestly, balance that in a short the basis we're able and had quarter what we first confidence year. the the we more of forecast term decision in use forecast

are year-over-year that later most from think first go I the was challenging the will year. as basis comparisons getting we quarter do in the and comparison say better a we

our keep were to quarter margin is on of most continue and and year, year in well positioned I full updated. We the still to give prudent the because come our by to results you think the macro up the we'll second but thing while mean, a basis inventory delivering the choices we from you incorporate do thought was forecast. trends to balance of some that we've into seen not

Mark Altschwager

need move goods expectation, helpful. that the and quarter excess And as sales like which the here? should the there trajectory over very to sounds improve you. here, is sales Are think we I margins given mean, or on gross Thank spring change the be the That's we through any any it markdowns two how comment about should cleared? in year

Lisa Harper

answer Mark that. let I'll

Mark Mizicko

they're top they'll even No, the further as quarter. end down inventory levels heard, of be on of you down, the this at we're

proactively managing of the way feel great about for the are the positioned the the and inventory We product is balance year. seasonal

Mark Altschwager

driver structural? much. move us Okay. marketing Thank to too there, you It guidance guess last and be understand it I might lower and mean guess adjusted a EBITDA variable just are savings you. expectation, the it me but sounds driving this the how guidance. change might where Thank like help of EBITDA the lower the from you. much your didn't be marketing, more offset one bigger on. I maybe margin margin in I'll one Maybe implied pass despite or sales I

Paula Dempsey

Paula Hi, is Dempsey. Mark. This

some about right optimizations So yes, you're place the of taking now. are that right so absolutely

and of seeing the you starting at look through start through the the all leverage our we of year as think So rest the expenses, full you should quarter year. second

with we vendors currently some contracts are as our renegotiating several organization. those all certain currently moment mitigate that we to of over the the have Such So doing, at doing partnered projects of we're expenses. things currently some

our Also much management. earlier, mentioned approach -- we more inventory to much taking a as efficient approach even are Mark more

start improvements should also we seeing there. So

just we're overall, the of the year. for our So optimizing expenses remainder

to see EBITDA be should favorable. margin we So quite our

Mark Altschwager

of you best Thank great. luck. That's and

Lisa Harper

Thanks.

Operator

Thank you.

Xiao Our Please question. with America. Bank next question proceed is from with of Alice your

Alice Xiao

Hi. question. Thanks taking for my

margin, strategies, online a sourcing gross new you longer you is through benefit puts think in a you pieces Thanks. can those can like, new again, benefit longer talked the big us and remarks, prepared can And term the of big the of you takes from the freight think inflation walk some year and be? On normalization. and improved benefit of about how We the help this and magnitude bases, countries from second that how half. also balancing in of cost term, do assortment vendor expect sell-through possible of your origins then

Paula Dempsey

Paula. Yeah. Hi, Alice. is This

So margin that quarter, would say of is XX% first include gross freight. decline our you and inflationary that really that saw I a I also margin pressures that due would first from to in inbound in the would say

of is this So the great point. majority -- that to inflation the majority at due

Lisa Harper

And then for we improve. forward, every move our of room business line there and as is upside, to

So cost goods we of anticipate improvement.

year. SG&A balance broadly mentioned, we anticipate we the As of leveraging the for

investments and All the business of and business. that the done growth to with current in supporting being appropriate

to a we're lines related to think path started down of we are EBITDA and And including think of have we and cost quickly moving very have goods business. I So all retail leverage other able to that there I quick progress this a goods expense seeing margin. rationalizing meaningful and not be

opportunity the margin to the same line. customer. to calls, line that think our our performance But engage in there's that. we're have we sure and at room expand the EBITDA room to top want on time, with said other the continue I've as We I that protecting And more think that we make grow

Alice Xiao

And it. the mean, investment? you're additional this secondly, Thank to just you. Got elaborate loyalty planning might summer then program the also last you story are in does transformation. investment be require much require? I that that events then can incremental to how on year? And And going

Mark Mizicko

Yeah.

things So testing some we're the loyalty and stages stickiness early interested and what traffic store really both in for in the is online. level at and in, we're

the far loyalty the been testing us be Part and loyalty additional and things is for also opportunity past events some that to promotional reassess visits. as customer of we'll of some in our have decouple So getting participation required. as

So very our business. a -- in has of for very, important been Cash the part example, past Torrid

there's Torrid And some softness in been promotions. Cash

we're so there and that promotional then it making not the reinventing And doing a requirement. front, is some loyalty also on

touching expenses So the the event what in the on EBITDA baked last back the the half. done these marketing store of are fully we've that activations, to that you are for And year. see incremental into margins

Lisa Harper

are So of strongly believe and feel we And add would engagement as to some see in out approach. more philosophically, movement the a that activation -- a it's customer new these store frequency for customers. terms digital of we have has general. I and prove – approach and bring continue to in starting just part events reactivation as of productive incredibly well engage marketing a are with store customers just of And promising feel more activation purely new creating customer forward in strategy degree moving that more us versus XXX a that's broader

years Mark more strategy can been company on course, this changed fully. stores a over primarily very the as XXX top that to that incorporates strategy is several more everything speak But and more and historically last focused be has digital that of together. the the where Of of to has funnel symbiotic works

Mark Mizicko

being talked of majority to quarter part the customers. spend aimed Lisa a And marketing on reinvested just And our early we've digital at new first about, in of touch was what in middle of in we're traffic, and positive digital what into the funnel risk. terms the thought some seeing terms more traction driven would sales had be to counter and of we

out not in actually our new seeking customers audience we're the even matrix. as We're gaining of in them not losing, amount specifically we're

and that promising all continuing of looks So to experiment. we're

particularly insights to I little data optimize little I a more bit more new we data from a room think there's the as lot earlier, get a as plan. mentioned

Alice Xiao

luck. of That's super helpful. Best

Lisa Harper

Thank you.

Operator

you. Thank

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

Dana Telsey

a and everyone. afternoon, more bit saw, Good online little pass if what you then any just stores also? there's the Hi. through balance how costs, the inflationary margin refined. trends strategies out you between bit, And of the of product difference gross that unpacking with little Can the a the regionally are are planning the that And year? impact pricing and of being you traffic for

and in fourth looking it quarters, we last third does differ to versus comparison So and online be year store? should the what at

Lisa Harper

of lockstep from was channels. you. at both channels to normalized levels And of both see Thank starting traffic middle March until down the and kind the baseline in in of Traffic May. middle we're

So the you by to in want it was the gross the consistent Do do traffic channel regionally margin? and shift customer trends.

Paula Dempsey

Yeah.

for margin, truly expecting we with depleting in are even Dana, that was to acquired not with inflationary as higher all half are As we freights year. is, pressured reason be gross second inventory challenges. last of the so the The process the

the later really so And we're benefit that in in recognizing half the of year. on, anticipating

what going kind away. of see that's really the we're starting inflationary go pressure to So to

Dana Telsey

just Lisa, side you in where Got been level or it. same strategies back on bringing half, or adjust of different basics And thing, of trends? other will the And there's anything you does change be the you're product -- demand? one for more you. a to that is did the more Thank it more in drive or sales it fashion it how the promotions pricing then see

Mark Mizicko

So the I'll touch first on pricing.

I we've So a made in big pricing. think improvement

discounts the some by products the wants. are finding in holding more out is targeted that product she would gate and new immediately we typically well On to the still responding she have the that off that to received being and on that discounted are brand past website, we're item, there

necessarily continue will so of gain the optimize through So throughs, gain to but margin back much later online. A the don't more our and expansion strategy then as be pricing, to lot anticipate online expansion in accordingly, to we'll pricing half, margin adapting continue particularly online. to we we -- throughs, through sell not that come try to better discount as sell we'll as we get having start better see

earlier store getting channel, innings targeted terms in the the we're probably in promotions. in In of our more

So in well we to turning they on swim, targeted some group were discounts by for based through do example, goods. store swim able how were the

a do room seasonal well through to things and as goods in are in that as that turning a Really, more that lot a have little need in more softer just are bit things versus doing. discounts. we'll So little well

to our the goal better overall channels in versus discount. So discount both get is at allocating just discount needs to what more general a

Lisa Harper

first basics we the what need. was fashion, the versus is, very saw shopping still pretty she On was in specific universally still to quarter she and buying

think back about -- remarks, something in prepared the we So promotions. we said on I pulling

As decisions were would levels the that could elasticity making of be we not and elasticity that promotions traditionally had we we find the in with. that would of essentially some have happy

category pricing Mark's on So promotions store surgically worked by and and responded group to and stores. point her on in back a managed response to really behaviors pulled to that, some basis online more we and

and some and we in new jackets I new categories responded them brought as think some brought to. to basics, some really in really well that responded she ribs she's and dress tops have and

couple respond in has bit to also as And likely on more changed weather seen weeks, little right responding last the softer a accelerate now a she's we've basics, basics fashion. to So but little of bit. the

need toward more specific and during oriented So primarily driven fashion. quarter, first the was by she

Dana Telsey

you. Thank

Operator

you. Thank

proceed Jefferies. next Excuse question Sachs. proceed Corey question with Roach our your Our with Please is me, Goldman is Please question. next Tarlowe question. your with Brooke with from from

Corey Tarlowe

of to you momentum guess nice afternoon, in little bit It's Hi. that? Could what Good thanks a being and AUR? you conversion than spite conversion bit a seeing and AUR. traffic my and to kind about even what you of worse question. thought talked is little Lisa, you the in see good taking think have driving I for that see momentum about talk in might

a would more helpful color we bit So be there? if get little

Lisa Harper

she you know Sure. conversion guys have to And positive you ways there lot if wanted sentiments the a the of that, chatter broadly product she I gauge is was and would with needs When a she buy, terms that customer specific I what was she different more has in -- broadly. say of into toward customer came positive. finding she sentiment was converting.

I the think aided that of pricing really that talked will some And strategies AUR the with about so combined and continue. Mark

this accelerate become to forward adept think at move adapted as more I we those to choices. and more

when really quite fact should that because And was is, customer year choppiness were we we of news because news we had And for in the our quarter news Good she Good sentiment the it's our like going if us go been is improve of good in discounting as we the shape. also by the clearing situation. so of And challenge we composition so the first through is, positive. is, to AUR with of the through inventory – heavily into discern primarily is this hard inventory had the this that great exacerbated year. the many inventory. last kind the traffic good

that I So -- we we're mentioned That for a behind us. have remarks, and question the approach quarter my conservative the is that year. and earlier Mark the to of of – the as year taking hardest just his being said, – in balance

and that of gross and very, margin lot aspects a merch expecting have that initiatives that I very think, We are seeing see to will we'll out are exciting well. the expansion help as and are that underway that addressing margin we continue proving and drive are of

conservative of well prudent moving wanted choppiness be was and managed of we which the I that after and of inventories first you do to the the responsibly. the see, say like this a in was to will customer expansion would good incredibly just pricing question also we It is, that so the year. our asking quarter, margins. we appreciate think it And midst I story behavior to felt I find point, So from that, were balance both through as in

by So we're right that I'm that several encouraged of the then improvement now. and we're KPIs in recovery seeing, seeing broad

Corey Tarlowe

you where Could and made, comment give great. those bit the you an more on think to about maybe follow-up talked color forward? That's you to just of going that then be earlier expect some spending. what you optimizing optimizations could you occur Lisa, little And a opportunity about

Lisa Harper

that of margin we a Sure. going there. there. that I Paula is business customer and mentioned have staff payroll payroll manage across that's lot store then And -- much how it side. I payroll aspect to gross the to mean, big trends. and do a I we we of that chunk traffic stores detailed opportunity have are approach I a have think our benefit And we every I think big think to more freight the we the chunks on have store

remember we're guys -- putting in as this distribution trouble shipping new time, and new out at have were putting ERP the a and DC. We things last we're we of year center building, having you a

That of and out -- very more getting distribution. we're and is more working our smoothly smooth productivity

So we're down saving going and outgoing charges. there on unit is per distribution on incoming and cost fulfillment

The we there. We're So line on finding making Difficulty] business in the aligned broad the sorry of right and about I'm opportunity that. pretty are decisions focus that. [Technical very on is much very, every the

in said the will think as leverage several we as SG&A see you year. balance times said, in this of you that I -- we've

Corey Tarlowe

the luck. of all Great. so and help for Thank you much best

Lisa Harper

you. Thank

Operator

you. Thank

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

Brooke Roach

to could difficulties Torrid has of looks sophisticated elaborate edgier you technical into the for styles was Can I as and mix a identified in color changes on we past. that? apologies little inventory the basis? neutral and the should of on the afternoon more on And growth we year the of on and that little you the expect year-on-year cadence you known that subsequently timeline inventory, deeper the provide assortment been the a assortment between can then go you. of that for magnitude Lisa, Thank through move bit how the some a Good you've the the earlier. hoping driving dive

Lisa Harper

time, would Sure. right in word. been has I'm to that and planning going I I'll then would Mark. assortment core over it channel of terms to start kind say over but that, many turn the is processes muddled, say of attribution, I

Mark is buying on aspect It's channel. that oriented investments really And top process of were there [indiscernible] the swings department normally of a by so broader would you and expect. than by solution and exactly

color over for so of give the the year. to trends going that kind it on turn I'm him to and And also to inventory more

Mark Mizicko

Brooke. Tagging Yeah. what Lisa said, on

in we That's just driving of front but more really what what magnitude building responds responding and important the even think to. big on her, perspective, our of of an of the that's of I between changes. customer shifts she's part comes in a from edginess, fashion from opportunity not putting product see to that terms core look

and in we there bigger So than were a kind core high on They should They something well selling margin. just ops by for last way at much of away new. some in walked customer fabrications we were performing were received year we example, the from have. were to that probably They a through. moved

a what successes be building hope hindsight build do we're forward whereas walking of success. away on we than and a go bigger and in do on And success the is how -- rather we to finding how from continue

sense. makes that hope I think I

about what we're that of changes very talking our are part that when our bigger and to when to first the through is we're from line of that concepts the beginning and all buys. process doing process the way beginning planning in we're on So hindsight the

the terms how we of choice part to our work harder, improving know make So lot as as will there's well assortment focus markup. benefit us of our initial on a of which four in productivity

edgy would work swings the I terms magnitude that of is the much in than So looks. from ore bigger say into

the were is. said we than Regarding first We're be of and We'll this before. be in inventory the guess for down our receipts half our better we like anticipate will margin back anticipating. like where a back happy We levels lot I the little inventory inventory we're the quarter. year. of sell upside half inventory, we more even which the year in of we rig that at a end is And the where are it quarter the where behind of at rate for with throughs bit price,

rest for the of So position with year. very pleased is our where

Brooke Roach

pass you. I'll it on. Thank

Operator

you. Thank

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

Jonna Kim

my Thank taking for you question.

you're one Thank from demand in so think marketing the any provide on still investment? funds, your, me. you marketing you Could detail mentioned higher you And income this have income, customer return in about behavior environment, quick Just you priorities driving key are groups? on you ensuring as pulling while drive different much. a also back what via your on you

Mark Mizicko

pulling got I back So on part the on marketing.

been So we've there's or adjustments back traffic year made. headwinds half the of don't steady I any dollars, we're the percent from a in anticipate conversion marketing marketing for pretty I adjustment we've think slight as a to any where been.

we're little think on marketing I how bit is ROI an how visits getting talked how more little what we're is, those and investing and getting earlier, a in incremental story I we're we're working immediate. a about is that bigger -- the bit As

we're So two. ROI back for getting over pay new year that to ROIs or differently, back customer that next the say pay over a looking or that could some more, a rather quarter than

little first part So than your you year. question? of of to the if were at trying part repeat where positioned a through the get And sooner first the we flow EBITDA could

Lisa Harper

I have it. I'll answer it.

-- about And was So that in income groups quarter. you income it is across right? the was performance So group. all yes, by first asked down it

seen haven't don't quarter, been we case and first forward. across anticipate consistent that income. it We being was than has it we for that the as move But more the

Jonna Kim

much. so you Thank it. Got

Operator

you. Thank

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

Alex Straton

a were me, structure from Torrid for changes that. the taking of some the Thanks event, considering you Cash Great. Two on question. just the I know lot to

those in I for have about you're how any then differently of upcoming thinking quarter? been wondering, So just implemented Mark, returning this are And or you that here. I'm know newer

the you're on the that about action? most longer lot. near can excited that So you've maybe you term can what there changes are call kind the far? you you And a in in of Thanks or terms act initiatives do the of ones, term so then the immediately which barriers on on maybe think outlined

Mark Mizicko

you, Thank Alex. Sure.

a second hadn't to Cash So weren't Torrid had really first work distributed and quarter, also Torrid some with Torrid we'd we tried we Torrid out distributed Cash for adding Cash It a that hoped. event. Cash, I'd we things the we in didn't that tried what the quarter. second who I say way pleased for we and before, in terms of we guess

the product little For where June what a is this bit it we quarter, going do in to into event from be be is, transitional. was July more going to the moved planning to where we're

for of create things as provide the trying as there to bit rehabilitate trying little her it sense So speak, more buy. some a is far to around We've reason of to to urgency of I'm Cash. different days. the more trying so event more of also to shortened Torrid We're and the number a scarcity

So highlights we're are the that those a few making. of

talked bit about, I'm talked In some initiatives we approach of to about I in our a changes terms things little pricing of little We and promotion. excited mean, the short bit term a that about marketing.

number touched months. We we really ship We starting somewhat use capability way a of store. the We end on. to ship of or the sales And mitigated for EBITDA. that we of turned on additional demand or haven't from drive from way store had it kind reimagine as back this March,

compared be eligible it to sales, including. shipper and not the seeing be it's we're we're that driving that we're way from there in incremental And past managing is, to we through a what driving it managed in what to way margin, we're what the it's the nice incremental flow including and store really appears

mid-single and it. And buying that's digits so, an seeing we're inventory available on of she's additional the channel online

year allow and less as we at regular to clearance. that's units a clear move the and we exciting that's that us more anticipate at price So lot going to units through

margin so upside we're that a going there to as store. get is far have contemplated we And as rate what ship

of is middle we're hope to be to And around year, being in that by and better impact back that little longer to strategies. getting but we're impact is cost some a the bigger half. conjunction and guess strategic then our able and our core term, about the ship And more we and increased from web negotiate very standing as the A a being to see that's to of powerful get some next something through year way more I where a for sell bit be will assortment from going store goods we in a and of costs. that going place get this into

is that, bigger be that So benefit much I XXXX to going XXXX. anticipate than a

whole balancing to And of then delivery we'll a of back next year doing. a going having in few but – the impact we're we're a of year. see assortment impact going some see impact definitely we're half, the to deliveries that the We're lot of whereas only have

move bigger get we So in I expect benefit year. that into will next as the

Alex Straton

Thanks good a luck. lot

Mark Mizicko

Thank you.

Operator

over turn time. Thank back I further for like floor you. this There to Harper no questions to at are Lisa would comments. CEO, the closing

Lisa Harper

of joining again. everyone with to summer and with Thanks, the on for your Appreciate forward questions your the you, operator. brand. Thanks the the Thanks, I look We us. guess being back focus at QX end results.

Operator

Thank you. today's This concludes teleconference.

at may you. Thank this your You disconnect time. lines

Torrid (CURV) 7 Jun 232023 Q1 Earnings call transcript