Torrid Holdings (CURV) Stock Forecast & Price Target

Torrid Holdings Inc. is poised for growth due to its strategic increase in annual marketing spend, which has risen to approximately 6% of revenue to enhance brand awareness and customer retention following planned store closures. The company's focus on sub-brands has led to significant performance improvements, with expectations for sub-brands to comprise 25%-30% of the total assortment by FY26, benefiting margins through reduced promotions and higher full-price sell-through rates. Additionally, the forecasted adjusted EBITDA margin of 7.7%, alongside the anticipated revenue growth from sub-brands trending toward approximately $80 million for the year, underscores a positive financial outlook for the company.

Torrid Holdings Inc. experienced a significant decline in its operating margin, contracting by 260 basis points year-over-year to 0.1%, which fell below both internal estimates and consensus expectations. Additionally, total operating expenses increased as a percentage of sales, rising 160 basis points year-over-year to 34.9%, which exceeded forecasts for moderate deleverage. The company's revenue also decreased by 7.7% year-over-year to $262.8 million, indicating ongoing financial challenges and prompting a downward revision of its outlook for the year amid rising tariffs and macroeconomic uncertainties.