Torrid NYSE: CURV reported second-quarter fiscal 2026 net sales of $231.7 million and adjusted EBITDA of $23.3 million, including an $11.1 million tariff refund benefit recognized in cost of goods sold. Excluding that benefit, adjusted EBITDA was $12.1 million, within the company’s guidance range.
Comparable sales declined 6.3% in the quarter, while net sales fell from $262.8 million a year earlier. However, management said sales trends improved materially as the quarter progressed, with comparable sales returning to positive territory in July and momentum continuing into August.
“June was genuinely a difficult month for us,” Chief Executive Officer Lisa Harper said, citing elevated gas prices and seasonal pressures on discretionary spending. Harper said July represented a “significant pivot,” driven by improved customer reactivation, acquisition across marketing channels and the relaunch of the company’s Casting Call community events.
Marketing channels and customer-file strategy
Torrid said its principal fiscal 2026 objective is to expand its customer file through customer acquisition, reactivation and retention. Chief Commercial Officer Ashlee Wheeler said all 11 marketing channels improved sequentially in July, contributing to positive comparable sales for the month.
According to Wheeler, the company saw year-over-year digital customer growth in both July and August. Paid-media revenue rose by double digits in the second quarter despite lower spending than the prior year, resulting in improved return on ad spend. Paid revenue represented 12% of digital revenue, compared with 9% a year earlier.
For the second half, Torrid plans to increase digital marketing spending by roughly $1 million versus its original plan, though spending will remain 16% below the prior year. The company intends to direct the investment toward reactivation and customer prospecting, including paid social media, product listing ads and non-branded search.
The company also plans to launch a dedicated Festi media campaign on Sept. 25. Wheeler said Festi, Torrid’s largest sub-brand, is expected to be the most beneficial sub-brand for new customer acquisition and reactivation.
Torrid said organic-search revenue has been positive year over year since June after the company implemented initiatives spanning product content, category authority, technical infrastructure and AI visibility. Its mobile app was another source of digital improvement, with app revenue reaching nearly 40% of digital revenue in July. The app grew at a double-digit rate year over year and converts at approximately seven times the rate of the company’s desktop and mobile web experiences, Wheeler said.
Assortment, sub-brands and marketplace expansion
Management cited strength in knits, shorts, dresses, activewear and graphic tees. Harper said the company’s Super Soft fabric initiative in knit dressing has received a positive customer response, while footwear—which was a first-half sales headwind—has begun to perform above expectations following sourcing and assortment changes.
Footwear reduced second-quarter comparable sales by roughly 100 basis points, Chief Financial Officer Paula Dempsey said. The company expects the category to shift to a sales and margin tailwind in the second half.
Torrid’s sub-brands generated approximately 74% year-over-year growth through the first half. The company remains on track for sub-brand sales of $110 million in fiscal 2026, which would represent 60% growth from 2025 and about 12% of total net sales, up from 7% last year.
Opening-price-point merchandise accounted for approximately 35% of Torrid’s assortment and supported conversion and basket growth, management said. The company also introduced “Fashion at a Price,” an accessible mid-tier pricing category that has shown early success in denim, fashion knits, woven tops and sweaters.
Torrid expanded its third-party marketplace presence, going live on Macy’s in mid-July and Target more recently. It expects to launch on Walmart later this year. The company owns and fulfills inventory sold through the marketplaces and said the channel remains small but has been incremental, with many customers reached through these partnerships new to the customer file.
Profitability, store closures and outlook
Second-quarter gross profit was $89.7 million, compared with $93.5 million a year earlier, while reported gross margin increased to 38.7% from 35.6%. Excluding the tariff refund benefit, gross margin was 33.9%, down 170 basis points year over year, primarily due to targeted promotions.
SG&A expense declined $8.6 million to $61.9 million, reflecting savings from the company’s store footprint optimization effort. Torrid closed six stores during the quarter and ended the period with 457 locations, compared with 575 a year earlier. The company has closed 177 locations since beginning the program and said it has substantially completed the initiative.
Net income was $5.2 million, or $0.05 per share, compared with $1.6 million, or $0.02 per share, a year earlier. The company ended the quarter with $22 million in cash and cash equivalents, $39.7 million drawn on its revolving credit facility and total liquidity of $74.4 million.
Torrid maintained its full-year net sales outlook of $940 million to $960 million. It raised its reported adjusted EBITDA outlook to $76 million to $86 million to reflect the tariff refund benefit, while maintaining its adjusted EBITDA forecast excluding that benefit at $65 million to $75 million. The company expects approximately $40 million in fiscal 2026 expense savings from store optimization, with about $22 million realized in the first half.
For the third quarter, Torrid expects net sales of $230 million to $235 million and adjusted EBITDA of $15 million to $20 million. Management said its outlook assumes tariffs of 12% to 15% in the second half and does not include potential additional tariff refunds estimated at $1.5 million to $2.5 million.
About Torrid (NYSE:CURV)
Torrid, trading under the ticker CURV on the New York Stock Exchange, is a specialty retailer focused on plus-size women's fashion. Established in 2001 as a division of Hot Topic, Torrid has built its reputation on offering trend-driven apparel and accessories designed specifically for women who wear size 10 to 30. The company's product assortment spans casual wear, denim, activewear, intimates, footwear, and fashion‐forward accessories, catering to a demographic that has historically been underserved by mainstream retailers.
Over the years, Torrid has expanded from its early mall‐based store footprint to become a multichannel business.
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