Torrid Holdings (CURV) Stock Forecast & Price Target

Torrid Holdings is poised for growth through an increased annual marketing spend of approximately 6% of revenue, which is aimed at enhancing brand awareness and expanding its customer base, particularly after the planned closure of 180 stores. The company's sub-brands have demonstrated strong performance, with management anticipating their penetration in total assortment to rise to 25%-30% next fiscal year, which is expected to improve margins due to reduced promotions and higher full-priced sell-throughs. Overall, the projection for adjusted EBITDA reflects a positive margin expansion to 7.7%, alongside a forecasted revenue generation of around $80 million from the sub-brand portfolio, indicating robust demand and strategic positioning in the apparel market.

Torrid Holdings Inc. experienced a significant decline in revenue, with a 7.7% year-over-year drop to $262.8 million, leading to a contraction in the operating margin of 260 basis points to just 0.1%. Additionally, total operating expenses increased to 34.9% of sales, worsening from both the company's forecasts and consensus expectations, indicating insufficient cost management amid declining revenues. Compounding these issues, the company's heightened tariff rates and increased marketing investments in a challenging macroeconomic environment prompted a downward revision of its future outlook, signaling persistent financial pressures.