Torrid Holdings (CURV) Stock Forecast & Price Target

Torrid Holdings Inc. is poised for growth with increased marketing spend, rising to approximately 6% of revenue, which is aimed at expanding brand awareness and enhancing customer retention, particularly in light of planned store closures. The company's strategic focus on sub-brands, which are expected to significantly contribute to revenue by capturing greater market share and achieving higher full-priced sell-throughs, indicates robust potential for margin improvement. With an adjusted EBITDA forecast reflecting a 7.7% margin and sub-brands contributing upwards of $80 million in revenue, the company's multi-brand strategy is set to reinforce its financial performance and overall market presence.

Torrid Holdings Inc. is experiencing significant financial challenges, as evidenced by a 7.7% year-over-year decline in revenue to $262.8 million and an operating margin contraction of 260 basis points, resulting in a mere 0.1% operating margin, which fell short of consensus expectations. Furthermore, total operating expenses increased by 160 basis points year-over-year to 34.9% of sales, indicating worse-than-forecasted financial performance in controlling costs. The company's adjustment to its outlook, driven by higher tariff rates and continued macroeconomic uncertainty, has further solidified a negative outlook for its financial stability and growth prospects.