Torrid Holdings (CURV) Stock Forecast & Price Target

Torrid Holdings Inc. is experiencing a positive trajectory, supported by an increase in annual marketing spend to approximately 6% of revenue, aimed at enhancing brand awareness and expanding its customer base. Additionally, the company is reporting strong performance in its sub-brands, which are anticipated to significantly contribute to revenue growth and improve margins due to their higher full-priced sell-through rates and limited promotions. The adjusted EBITDA forecast indicates a margin of 7.7%, reflecting a year-over-year increase, while sub-brands are projected to reach approximately 25%-30% penetration of the total assortment by FY26, driving overall revenue toward an estimated $80 million for the year.

Torrid Holdings Inc. faces a negative outlook due to a significant contraction in its operating margin, which declined 260 basis points year-over-year to only 0.1%, falling well below both internal estimates and market consensus. Additionally, total operating expenses increased to 34.9% of sales, a 160 basis point increase relative to the previous year, which further reflects the company's challenges in managing costs effectively. Revenue also demonstrated weakness, declining 7.7% year-over-year to $262.8 million, and the company has subsequently lowered its guidance for the year amid continued macroeconomic uncertainties and higher operational costs.