CURV - Earnings call transcript Q2 2025

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Operator

Greetings. Welcome to Torrid Holdings Second Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Chinwe Abaelu, Chief Accounting Officer and Senior Vice President. Thank you.

begin. may You

Chinwe Abaelu

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

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

anticipate, terms not on to other include, to statements are of risks and will, to, of but actual statements should, plan, Forward-looking that X, materially. limited words cause and subject All expectations estimate today, based similar and results are containing September forward-looking differ statements XXXX. These could the meaning. in statements as may assumptions may, current words believe, uncertainties except, are

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

Lisa Harper

Hello, Chinwe. thank Thank you, today. for everyone, and us you joining

quarter high of adjusted came the EBITDA our end We and are range. in guidance pleased results in second sales which with our at

and basis a XX.X%. strong diligent we was of inventory shortly. expense $XX $XXX will which EBITDA were net sales EBITDA discuss X.X% comps, expansion by and our sales as adjusted quarter, percentage was the adjusted million, driven price increased XXX resulting in of and management, which points regular to This For million

total $XX quarter generated us Additionally, to allowing the in we meaningful successfully million end cash. free with flow, cash

are strategies details transformation. take on performance, the to our and more I'd provide Paula and we our like quarter to business today for time where some Ashlee Before second share

file was wallet excellence. Our platform X customer building additional completion, focused return and nearing and have first phase, share is capabilities, building which on scaling focused ago, is bottom-line active chain growth. Since product top- while product two and on Phase gaining that driving our driving realigning talent, years supply sourcing to delivering many approximately offerings, operational my on execution, focused enhancing expand we discussed improving positions a financial into phase operational product the and and expansion. strategy, many these capabilities. technical but highlight best-in-class digital foundation last I'd operational few levels data of that a several to inventory scalable on and like optimizing expanding us the of and digital these initiatives accelerate today. Historically, over building which to had Torrid's We've calls, discipline, We next evolution is capabilities. a worked initiatives: our of

now Our our XX% business total delivers customers program. XX% loyalty demand Direct of engaged in of and are our our

short- and dynamic last program both incremental growth. years Our us long-term our approach business build allowed data-centric marketing that has over to EBITDA the several a delivers to

retention seen in have our to last process. Lately, dynamic brand an from awareness, We on appreciable to in manage XXs reactivation, approach low increasing have a XX% to and disciplines this year have balanced focused and measurement. talent most we and the increase acquisition, the frequency recent

an of XX%. industry-leading satisfaction have to continue customer We score

as a customers a years. We customers. the these for purchase the that the tries acquisition favorable source our of of activated any that our We XX%. the XX% the of propensity store, stores profitability. operate as to reintroduction at highest stores customers. in on we spend with store Using invest customer first notably and Casting to the in customer most stores our in to with most omni If over Store our their lifetime she activation know omni broader a highest single-channel of engagement digital have upcoming with ever a this value opportunities which a of both in center activation, supports converts We becoming of customer become omni of product customers. An our store of Model the very increased program Search, stickiest are for rate purchase on allows experience, CAC amount us customers has executed. customers. that type she had the primary evangelical our X.Xx see brand focus from to the Call learn experience Our the about operate

two-thirds she always as our she have dedicated retail approximately though options represents on her of been has customers U.S. We that laser-focused we to women. minimal even acknowledge

committed we our remain we believe service stores, store we that can to rightsizing by our footprint. While customers better

As lifestyle our in and of presence leases renewal, focus on our centers come our base. the up is our increasing current store for improving productivity

very her that claim retailers make. products her change introduce to are life, We we cheerleaders that her few can as a

her life. associates company Our experienced customers tears and over could updated. The of tears over fits investments and with store with her most Torrid was product servicing We that experience needed are relief experienced and Systems up mission-driven supply store business. the keep customer. beauty. encouraging that clear not be to life-changing focus while chain had dressing fractured flatters to Despite found her live on not and scaled rooms, that the and our our the often have in joy, very our customer, best our

our we to XXXX suite with our roll have end implemented the systems out updates significant final of completed upgrade. be entire phase system to of We the financial enterprise when by

that distribution XX% with productivity and leave ordered they distribution supply DC include provides orders improvement and that XX% the year. are over levels chain in same the last now day service excellent of a the leadership talented center Our

of have We stores, XXX Canada. capability including all now to recent that from our to directly of customers in also expansion the capability the ship our

put, store have shipped customer either to our their delivered or optimal on we dynamic, have inventory home for efficient and store. flexible Our Simply their store demand be to as associates to and options product a agnostic any product capabilities order omni and customers it our allow can and choices. fulfillment customer for their all investments preferences. can choose fully for are to allow These can

have these and addition last dramatic In improvements changes, two investments the years to in identifying spent we costs. inventory executing product and overall

Our inventory company. XX% inventory XXXX the QX I rejoined of at start the than the is lower levels approximately when

heavily prices by committed Additionally, later, of in origin. had our increased retail is China inventory productive. our years XXXX, to primary we highly as and ticket were Two country XX% our

as the end mid-teens and be have year. of penetration in by will product we China have on with the sourcing decreased focused the strategies strongest partners, Our costs our our

added appreciable also is last improvement have balance in which our opening in this and overall resulting eliminated Important at position improvement period has working XXX We in the delivered we retail price up that of many $XX were year. same capital, QX and mix. This generated basis has empty cash disciplined XXXX. inventory margins, to equivalents cash in gross It in substantial calorie to quality expansion have points QX strategy point compared million the end better to XXXX in sales.

comps priced of We while a with our combination quarter in yielded comp and X%. That further was QX sales strong half X.X%. of negative the inflection represents blended comped regular clearance sales this positive in improving expansion. for year, sales point comp our XX%, addition to margin comps second the negative clearance and actions peak clearance The of believe product of comping result the to blended strategic regular second in the positive our sales price the

again and of benefits biggest us our bets into based quickly on the place nimble approach and strong-performing chase receipts I'm styles a customer as inventory with is greater ahead this we we closer in of One as making of changer and our happen. us reorder preference. still inventory customer to move allows This this QX being XX% allows of product with of so impressed with us start also this demand. Chasing dynamic delivery game year to trends strategy to chased team's to and is to insight forward,

a into in about transition product. When of mode most perhaps Torrid it build still back us always will has team retail, a market-driven of that explosive prior and and it to platform her give the the growth worked important hard with was we support of develop that round Our her to important XXXX retailer growth product in first a fit from her. to because ahead flattered to is the Torrid elements the converted vertical expectations quality brand that exceeded

couldn't underserved. and But [ and buy, she results. protect everything over to strategy mitigate but Our closet we seen to the stalled she in the the give provide could in has years, because so was innovation risk business was mall her her historical ] what

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our We existing will customer. fire not

age to XX% for customer denim assortment. power increased skinny what has denim year, have average I'll XX the a it XXXX. This enormous use of proxy brand we to-date. approximately as also but denim retain to Our highlights customers, the implemented shows Last was XX of from opportunities. since our

customer. forward approach August updated a demand. and baggy, tech a relevant exciting range denim Our chasing job, to straight. merchandising, We utility, silhouettes and design, including the assortment, team of approximately finishes to added ] are change product this deliver skinny and silhouettes to is product to fantastic [indiscernible] relaunched that had to together and remain This and wide development, the sourcing, move planning XX% The to decreased [ we Cinnamon marketing our worked transformation. have flare, and did satisfy of have denim and boot to design, our customer loving, year,

organization so much talent the We is in palpable. excitement their and have

highlighting know appealing be capsule our customers' to that vast. the will as share size core a to collections, capture more market brands younger opportunity customers. the ability year new energy and our introducing we To that notably deliver is In current as and concepts demographics, addition of for to we to product end, wallet excitement well most next overall world-class team's plus broader multiple

with will of in three You start collections. January capsule this product seeing XXXX release new the

traditional While aesthetic for after and we years, Torrid certain product the of shopping that's product looks a sees price not at know customers' exist. the that a She brands. over for variety has our her. Imagine appetite customers points developed

the the test opportunity We customers introduce will as gauge to new to well to demand expansion brand. product to use this as customer

addition a Intimates product we In in innovation building expansion robust are of pipeline to in our category. apparel,

technology we our two is new next the years, will our will franchises to ability be provide to be strategy supported expanding core frames to the platforms. The Critical solutions Intimates our to customers. to the reworking expansion of capabilities. curtain incorporate scale as by well also existing more as overall For of this catalog our

in scale customers. to underserved for new excited and more both merchandising our and gives sourcing, our the the result leverage marketing product will to We as opportunity progress teams we deeply in existing product sector. The relevant customers. engaged introduce omni existing chain. This these of planning you existing believe come, web products the to in efforts, platform, will will phase in our our new look design, Simply find we new other brand. more of to platforms up and strategy and also will concepts our forward new ideas while initiative. teams capabilities, There's of inventory providing transformation, every sharing serving have and second learned us disciplined reactivated and and remarkably and This to this core supply brands product this we are what also expansion Torrid practices executing and type as omni-store expansion, an put, is well internal distribution we our to leverage that with our this

what use learn optimized scale third will on accelerated phase, is which inform we We to and our focused and growth.

Ashlee low that in have EBITDA details optimization our growth and capsule like the of confident that, about business, and to the EBITDA margins net adjusted adjusted comps to discuss our sales call a turn results. program. And percentage store I'd right are collections through drive us adding to to new offering, core more executing over time. mid-teens expansion Key changes the to are as made with We product to of positioning drivers of mid-single-digit our we QX over

Ashlee Wheeler

results initiatives. and our QX margin you, an Thank our on update well marketing strategies then as our will Lisa. discussing as give I begin by merchandising today optimization and

customers We price as the are to newer in trends driving responding are are higher our with collections, business pleased we regular our seeing sales.

regular to gain continued all by all and price. comps the quarter, price at we X.X%, in During particular, regular double-digit categories with driven Apparel across our saw strength tops, comps momentum and dresses, increasing positive denim which

to inventory attributable a X.X%, our quarter. While decline was this managing XX% and healthier comp resulted in been a which which significantly position throughout down sales, have in total we the was markdown strategically

healthy both price reductions offset deliver very that the discounting. regular expanded sales having points in pressure total. category peak positive by basis markdown second second margin comp negative comps in we in the clearance through By half abate comp by from as quarter, back total. We as in cost reflected of XXX of we be we expect which by in driven of the reached negative in allowing year, of the We the the clearance comps fourth to quarter, depth Apparel headwind to our the will us and encouraged drag be Gross health anticipate X.X% comp selling, saw of to business quarter. an was what up product half the move remain the year-over-year of

very turned in the at quarter with XX% fast be our last markdown ending with continue having than inventory, inventory inventory and XX% management during less inventory We to of year. historically and pleased less our total

use. Positive denim built model, in in and of between, have long scarcity shapes design, sales the across silhouette and and by fulfillment of shift big and in the and offering We shapes of XX% variety will was reliance program. teams launched quarter, made for wash balanced price results incremental chased units on variety receipts the Apparel flexible in by dynamic denim product includes in our in of time. third our discounts, and into comps sell-throughs relevant high on be and a all categories range progress supported deep From regular product a and better This merchandising delivering more to Super broad footwear a major styling informed price By by that our flare discipline is pieces, commercial and reflect campaign relevant appeals reflected need a during is standpoint, the customers to support omni-channel This which chase our Apparel reduces remain in different quarter. We demand. promotional assortment for and not fourth of and useful. historically a second Intimates laser-focused business very in from trends planning great most regular business a transaction the top of proportion. certainly with seen accuracy. and is per with leg everything recently range in much Skinny leg a shifts shape in and cycle leg our wide that in proportions in fall styling growth that which true and a shapes end

recognize of share wallet product positive appeal customers. expand further our in the While we to on Building we head and our to believe response broader support refresh the we from very early, needs encouraged the of wardrobe core customers' momentum among our well-positioned are initial by range progress toe. opportunities a still assortment, to and and are offering expand existing to to customers

with will younger, leading-edge caters with investments classic range well and expansion To and suite will maximize aesthetics financial appeal and management. and one price-conscious more other and that planning differentiated lifestyle we more implementing feel support accurate to more launch our as in allow even customer look and further system. as productive We that assortment the to concepts. a several assortment allocation process are from capsule one systems inventory three This our preppy fashion a assortment and for merchandise greater productivity, of of collections assortment

will will remaining store believe capsule to last even more room and from collection of productive inventory to We that of the as curate value. the productivity still investment in allow customer this second customer assortment four the year progress to file our assortment. product, XXXX, store-specific in planning, that into back optimize reinvest improve an decisions. In of in to core quarter quarter incremental of and blending the provide deliver modules that the and us launch inventory lifetime attributes are regional will is data and growth part made rolled we the we've ability half currently the new assortment first utilizing will year, successfully assortment which we much there to inform As management the out and early module, platform the and first

platform Canada which we've customer e-commerce global our recently in a a our as well experience launched website, of other localized Additionally, customers worldwide. countries offers for as

have We seen this believe back demand response XXXX beyond. and half in a and yield very of positive will incremental the

brand of phase X gain successful driving a Torrid growth. customer our be incredibly Turning in was file engagement, have next the Call and campaign Casting launch. We applications point seen Torrid in over to acquired broad marketing; but year-over-year. received new among a percentage base a drove XX,XXX and awareness newly brand to of the is since growth our customers, not engaged customers year-to-date previously such in awareness positive rate reached reactivated only it and reactivation campaign that The customers, high-teens event

We of later our Call are announce to new to entire Torrid this winner and of thrilled face the today. year's community the Casting

in-store including exciting as loved trade-in to of Fit We an denim the year, events with credit Try customers a back as focused throughout toward well planned denim. up have a event Torrid [ new eligible thread and activations the other pair previously of ] half are where for On various

and our as committed provide immersive meaningful activations of unparalleled part to an which brand are a experience. ecosystem, marketing fit in-store foster and We and community

the Lastly, value. proposition customer which we continue retention value program, our drives in of and growth rate lifetime our industry-leading to loyalty improve supports

to earn will result customer which and transaction points increased among very We loyalty our various through believe purchase have in frequency base. loyal expanded for behaviors, the we opportunities customers engagement community

have progress incredibly are We proud the of we made.

momentum that, Paula. to will we to forward pass updating in positive tremendous of you us. in opportunities see continuing progress. And the call on and the front the I look our about with are We business We excited the

Paula Dempsey

Good Thank everyone, I for detailed XXXX. second today. you, now our fiscal a We're you quarter begin quarter followed performance, our by discussion will us with thank for Ashlee. morning, outlook with of our pleased joining and results. second very

Our guidance levels, product down offering, while previous sales came responded as end and we inventory year. to our high our the the from at the XX% with tightly adjusted customers of favorably to quarter ending in inventory continue EBITDA manage

of this and equivalents cash total same to the increase million, period cash of an All drove year. last $XX to $XX million compared our

to Comparable to came relative by year sales the comp year. $XXX For compared which last to price declined sales had net X.X% million sales. a of $XXX lower primarily X.X% XX% offset in in markdown levels a million second quarter, at ago, comp, due minus regular a sales positive

and We continue from we margin the as in by to million levels. Gross back fewer sales profit normalized primarily year, of expenses impact million or last million in $XX.X of sales performance reflecting clearance basis to driven markdowns. or $XXX expect XX% expense XX begin basis more $X.X a of gross of XXX severance. to net employee product quarter increase year X.X% million the a costs half SG&A bonuses, this to last investments to anniversary million $XX.X driven by strategic compared of The the $XXX rebate lower inventory XX% year. and XX.X% increased increase onetime is or technology related were to of points net points

expense quarter we of did the second quarter reminder, expenses incur performance year. Marketing a were $XX As last million year. compared million last in the $XX.X to not in bonus

year. million this employee year. $X.X quarter to share sales, expense increased of same to last which marketing of for of equivalent points income $X.XX of per per percentage the $X.X to is onetime in figure per basis million or a or period Net was $X.XX is $X.XX compared net to in compared share. for severance, last $X.X million share Included income the X.X% X.X% net a XX second As

to adjusted is a manage XX.X%. XXX EBITDA our believe that to an Adjusted EBITDA we sales of addition increased GAAP that In compared measures, to to a increased percentage million EBITDA X.X% as important $XX.X points measure basis used net year million we and $XX.X ago. business. Adjusted evaluate to

revolving the ended agreement. and of credit we equivalents sheet; quarter on our cash cash $XX borrowings balance the with to no and Moving million

credit total end at debt the the agreement was $XXX quarter including $XXX of million liquidity, in was XXXX. Total borrowing our to quarter second available capacity compared million. the Our revolving $XXX under of million

improve, with a inventory XX% quarter continued million inventory the $XXX ending to year to to Our million compared ago. levels $XXX down

current Before an malls for remainder we like the centers. the efforts. with outdoor openings fleet approximately on would where optimization by analysis locations of enclosed completed outlook, We discuss transition in our of XX% providing situated the are remainder closures recently a ongoing our base, I store to to in our year our update detailed store store and of

will the strategically for few store that customers and profitability, outdoor and a for In working our critical these preference split we our rates equal outdoor Given rebalance growth the which higher trajectory. centers, also that next locations between footprint, role show yield centers response, clear has recognize years. aiming an in to conversion mall in we're play our

These fiscal As an part contribute usual impact end stores XXX XX that points to to with our our additional of timed EBITDA this expansion of channels. adjusted to XXXX our year, these initiative, points fiscal cadence a or redirect we in plan our closures on for net revenue online closures sales this XX with XXXX. basis percentage to financials minimal of to will with basis approximately expected impact ensuring nearby the anticipate limited by be lease XX as will XX we closures on of stores additional line customers of top as XXXX. We close fiscal expirations, XX

our fleet. goal to for years, our store as continue optimize a of will We fleet leases with creating the ultimate mix come balanced up over store coming renewal the in

on in focused the EBITDA adjusted margin, we gross while attention positive the our the to expand pleased to turn continuing second results half in made of progress to half. and will which remainder first sales, XXXX, driving lead comparable with As we're are the healthy

for X our current half. the taking now narrowing and guidance adjusted to second billion. We're year the full We $X.XXX between $XXX our end months billion trends of data year now $XXX of million sales high actual project while guidance and encouraging, fiscal raising of we're our sales million. lower range are the performance outlook to EBITDA end the have to While guide keeping $X.XXX we sales a cautious in our as guidance at approach net

with in promotions reduction robust due to SG&A driven sustained by We inventory expenses expect sales and margins which expected prices product consistent of million XXXX. percentage be gross new better second remain includes between as stores. positive are in million, is to costs, in continue, sales to opening new to the half and levels. fewer to well investments the comparable as and a $XX fiscal of expected XX expenditure opening $XX Capital improvements marketing to systems XX and technology as of

Now comments quarter let for expectations on me the fiscal provide third our XXXX. of some

workforce delivering margins, changed sales to call. not expanding include we comparable million. quarter, investments XXXX For This the you. working $XXX between million portion making call in to be question-and-answer will QX in operator of turn To capital and and conclude, have our results begin highlight business. range now EBITDA be adjusted improvements third the year, our over solid the million our Thank ongoing $XX to to $XXX the the and the improving strategic million priorities strong across our $XX technology sales, project and and net of our to for results. I

Operator

Dana Telsey Our first from Instructions] Advisory with [Operator Telsey Group. is question

Dana Telsey

on by fleet look additional should how of program sell-through? of optimization the in locations of XX cadence fleet whether you pricing the about then, costs the about number seeing just for target then going ability enclosed the you like, this cadence What price what think closures the Lisa, closures XX you to was more performance about the ultimate full thinking and and anything you end on the announced you How and just quarter? terms malls. category progress is product and XX% comps. in do the congratulations through think that for forward? And What located year, And price of this stores, your As regular on are pricing? are

Paula Dempsey

is take the first optimization. fleet Hi I'll part Dana, this the on Paula.

We're XX expire. pretty the leases XX they the to to of likely with comes at year, -- this it well for when most additional So it the will when QX. all cadence end will happen closures timing

where take actual It's our a impact XX%-XX% in ]. It be few and target there years on to doing to should balancing targeting while really us more will So not regards be [ to we're going no we're fleet closures. our profitability. And these be, to that will going our we're get to be overnight, there.

So also we're not going but closing going outdoor be only be opening there's them, in to to centers.

would be the well-balanced the I anywhere So expect in a place to to fleet years. X X next

Lisa Harper

on then other lot a And questions, we there. have the

So price as full we've historically faster with definitely in the our ever, progress. sell-through. we if in turning it's her happy fastest mentioned we're than comments, Ashlee while. made We're turned know don't a I but

developing scarcity of and the with that. terms and focused our clearance with really really in comfortable levels productivity terms In that, the able reinforce Chase the again model model. and on of inventory we're in to of really We that removed empty being sales sales calorie

together us cost the and those. managing of I goods. be as into on chase focus we're what that's additional We're talked our think, how managing really of capabilities their that. really And about seeing and cost of their platforming in with partners the fabrics, reinforcing and think of forward capability happier organization them inventory some savings was and in with of to so of move our vendors all previously, core which dramatic I we Even Chase, terms with shifts of terms really exemplify the we're I'm those strategy really combined benefit these, proud make goods. giving still strong terms and we've we're in pretty

be goods. -- the capability of but to still bringing continue in are cost have seen in we've Again, this into So that us combined we that some all to improvement level -- opportunity. the of at year, currently the for those it have see we won't

specific we're in model -- programs. And opportunity have will of improvement that still inventory improvement [ managing -- see, more fully of assumptions stock But the and we and half customer the this sort system even specificity detail store-by-store demands allow we balance in loss, core our how where we've to opportunity new and room geographies. of inventory the the think are that we some have four the kind made we will that's productivity, mentioned, will now, a like first historically as that play in to modules right core in dramatic and of still also with them be based us have stocks two and those ] Ashlee on have We of quarter. improve allocation model done by early for so be regions that

come both optimization the able Ashlee to that Denim, to with augment and more sell-through, always we're with sell-through I'd on of that, being lots kind of time. Category said, price still just the what into very chase reinforce idea product So happy will improving over that. full which that inventory cost, performance;

we And platform moved products our and into fact, jackets all quarter Tops, fabrics and there through our working. working, are platform then first fabrics of quarter as year. the chase of sweaters, are dresses fourth In replenishing next we still particularly

performance with happy through categories. really the So multiple balanced

Operator

Tarlowe from is Corey with Jefferies. question next Our

Corey Tarlowe

ability provided in a really to chase. Great. remarks your Lisa, your stat prepared interesting you around

to an versus half year? the the going into chase to the season to your mentioned what as so or put we've think now you buy you it might that I where ability about for forward that you XX% there prior context open we talk in of was availability your sort of quarter. Is and P&L that is into of mean back any had been fourth way for terms inventory head something still have in like what

Lisa Harper

in Corey, an way the we -- Hi since haven't appreciable would Sure. XXXX, I chased say. really

our XX% have, to bit. that We're currently ability receipts but receipts. hasn't chase of QX in of did reawakening the -- chase in are is muscle this So a kind utilized really organization a

all buy. being to in we're play So that to open able fill currently. of We're

exciting. that's so And

of a I the think chasing at initial this, that closer you margin Chase -- is think, than higher to as based closer that. I reorders on preferences. understanding maybe sell-through. to could do me, to obviously, get to are customer on bit there demand, opportunity chase come But little Many these more are styles XX% most. we're

our to making will capability. strategy in So as more able our the more inventory of a development doing job inventory to overall more information these And product this that vendors its [indiscernible] and manage are investment. able And needs. being productivity chase makes be our our being to have core effectively more and before and meet great team we productive

Corey Tarlowe

the quarter-to-date? just more the could and That's maybe trends cadence quarter color provide you any great. you're seeing much. on some And then throughout so then Thanks

Lisa Harper

to want that You talk about Ashlee?

Ashlee Wheeler

really I early Yeah. well. was part June throughout as quarter May strong, mean Corey, the trends of

strong Torrid many think we cash a of event we're the then holiday. proud we retailers, very, that ] to July. very a saw to really, I Xth in of finish [ July strong with quarter tougher really had similar But

a think holidays, bumpiness little the quarter otherwise I around So our exceeded Xth expectations. July but of the

are in, As a of on month we track. for QX start the with

Corey Tarlowe

so much, Thank Great. of you and best luck.

Operator

Our Morgan with Alex Straton Stanley. next from question is

Alexandra Straton

Perfect.

there? we little Paula, end. back what's the for Just trimming, do the I guidance, bit a just walk high a you And assumed comp through a despite sales conservatism couple full of on half. year really more driving question. improvement have of two-part Can still in know then the sort that trimmed kind us you

And help that illuminating some the there? age bit gave. you a data what strategy detail the from gives Lisa, over there, what back just where secondly, customer I the with more down So just confidence just just or okay it is sits increasing to bring guess, then what Is that time, on of me for you understand, or goal little average you're is just plan here? the if

Paula Dempsey

is this Alex, Paula. Hi

the half the second think months taken really for place. I guidance, actual just have to already we're ] So of Six right? guidance our in year, [ tightening regards of

know understanding of good have business the So is. a we where -- we

clear we guidance from have that year, had we standpoint. last and in last expect Lisa up. And our We results extra one QX, -- for do guidance thing I saw to that a expect reflecting very that start point right? just topline and we brought that So QX worth our we tightened and we So our from think $XX was do that perspective, QX, remember do we inflection to -- have is that our specifically about were an had million. you for year, week,

capsules don't also inventory. we're It's We're -- that we're quarter during conservative -- our are. which So quarter where in QX. time being we targets think be I a our to new going get chasing launching launching to that are to be to with for realistic we're able

covers. that hopefully, So

Lisa Harper

the little brand. organization really age the We're hi to I'll that And as a I is talk stay My age. goal, rebalance an they goal Alex, customer happy be think with But customer our again, about average that our would bit younger. stickiness world-class. the of

productivity -- forward and we and innovation on the assortment to sure, franchises like -- in on great sure as really of capsule levels in demand. our terms core decisions. product resulted become consumer commercial the with are focus making relevant have spoke those we of customer denim But move I Our making concepts

customer it towards I total average down file. think that grow the as growing of the customer I will we expect And file, slightly. that all guide age will come

and were of I involvement we've the without it's We today, Model Model I and our activation think ever the that that into target group the age that had like average competitors we XX, important core of type -- mean Search We way. managing were in the think, of most in I other announced lot that. interest in to and applicants age right the most Search targeted note, winner was that had of in in naturally a this it engagement their of and program us before. And any had that. --

brand in have, of capabilities customer. We groups will all leveraging while into evangelical expand product the some mindsets from of we those our have [indiscernible] store platform. we our that dedicated different to opportunity And away while our initiatives so and product certainly I'm the walk with and age to offerings web not incorporate excited an

that associated protect and expand core ensuring excited and we expand So the to while very that product with focused business on look we opportunity the about the opportunity.

Operator

Our with is next question William Blair. Dylan from Carden

Dylan Carden

on expect efficiency to you're for seeing? And business of Just curious, mean might curious rattled of much just is off margin low kind I'm the soup nuts. of some timing margin. pre-pandemic more guess, the you've are broader to to you've kind done just return sort so to gross you relative nice there teens you structural from flowing I the period? of when really of that broader that here a or And improve were even where discussion we through that I standpoint, a efficiency that playing

Lisa Harper

referring you're to EBITDA margin? Dylan, clarity, for Just

Dylan Carden

Yeah. I maybe want either you really EBITDA, mean or to operating talk about it.

Lisa Harper

in I EBITDA We opportunity rebalance quarter. have mean, I in to that margins we margin XX.X% think fourth this we think kind quarter. of delivered

gift-giving some pretty -- of that I have, think are sales have overinvested players we've think build in same and the don't I quarter-to-quarter. We overinvest type seasonal flat that. our we

with So I marketing piece quarter, of you it's in whether of payroll some one margin in think as that have, chosen inventory the terms rightsizing have is has of or the going our we that be be in expansion to as promotional pressure of the investment like and the don't company to fourth to assortment kind opportunity we're feel position the past. perhaps and promotional or

very about can also platform, what I talked path built like this reasonable. can Based on of -- feel that the quarter, that at time, do think low we've this would that we kind over I be built we low So point. back we this I we a mid-teens the platform have to feel leverage strongly operational teens. And to we but fourth

or fundamental want EBITDA the at that and should flow-through about very the start say been above and to be I now the flow-through to in been don't it's stable. We should be has developed investments -- should feel made, but levels scaling have of and current leveraging accelerate, investment. flow-through like that platform So growth as think this terms I

like So the be back next accomplished several to path years. I'm can to low happy with in the mid-teens feel and that our

Dylan Carden

to And or guess of opening or just a just the through XX-XX that you're balance I Is end target further going in there closures of then on where medium mix this that to a healthier I'm sort more you're XX-XX with And is repositioning. sort clarification just primarily of is looking store curious, is closures out? to the point of get the to get term?

Paula Dempsey

Sorry.

So yes, this is Paula.

It's openings. targeting there. So we be just to overnight. But through X earlier, closures. XX-XX closures X definitely not will be not with to to be it take in years like we and going and will to it's It get going mentioned are the mix

to timing we opening, going opening closing. and be where there be be that there's may will a So it than more more closing might times be there than

X and be why that's believe it's I years to to to XX-XX take X So that to it's a balance. going mix, get going to

Dylan Carden

XX-XX over is X achievable is sense. that's X Makes And something is optimal to the years? XX-XX or

Paula Dempsey

geographical do might I good might we locations weather fairly honest. etcetera. the and centers mean, be malls to be specifically are in be colder enclosed like have both, that It's very like

but out we XX-XX loans, meets So I is -- wouldn't all both. necessarily of say enclosed to get want it would

Lisa Harper

it. things I know over mean optimal, based today, we on that's we time, we'll and what what but as think analyze continue change to

to think to going to of X XX think, next a be of and over I'll kind reasonable, that, yes, still I short-term reinforce in closures. time, I X But opening, there XX to there's the our we're path getting aspect years this just is year.

So it's game. closure remix not just is net It a a game.

Operator

William next America. of Our from question Reuter Instructions] Bank is [Operator with

William Reuter

guys. Hey

Lisa Harper

hear can't operator. you we Sorry,

Operator

line. Williams lost We

no and you can have [ to I want pause at if unless this ], further questions see I We reconnect him. moment, could

Lisa Harper

We results so you, today. time. quarter close joining guys, forward third you just look at imminently. with this much We'll sharing us to our Thank for

So thank you Thank the you. interest your for in company.

Operator

conclude Thank today's you. conference. will This

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

Torrid (CURV) 4 Sep 242025 Q2 Earnings call transcript