Torrid Holdings (CURV) Stock Forecast & Price Target

Torrid Holdings Inc. is enhancing its marketing strategy, increasing annual marketing spend to approximately 6% of revenue to boost brand awareness and customer engagement, which has already shown a 20.4% year-over-year increase in marketing dollars. The company's focus on sub-brands is proving effective, with expectations for penetration to reach 25%-30% by fiscal year 2026, driven by higher full-priced sell-throughs and limited promotions, ultimately benefiting profit margins. Furthermore, the adjusted EBITDA margin forecast of 7.7%, reflecting a 30 basis point year-over-year improvement, indicates solid operational performance and supports a positive outlook for the company's financial health.

Torrid Holdings Inc. reported a significant contraction in its operating margin, which fell 260 basis points year-over-year to a mere 0.1%, failing to meet both internal and consensus estimates. Additionally, total operating expenses increased on a percentage of sales basis, rising 160 basis points year-over-year to 34.9%, contrary to expectations for a more favorable outcome. Revenue also declined by 7.7% year-over-year to $262.8 million, reflecting ongoing challenges exacerbated by rising tariff rates and macroeconomic uncertainties, leading the company to lower its outlook for the year.