- Delivered Fourth Quarter Net Sales at the upper end of
expectations
- Exceeded Fourth Quarter Adjusted EBITDA1 guidance
- Initiates Fiscal 2023 Guidance
Torrid Holdings Inc. (“Torrid” or the “Company”) (NYSE: CURV), a
direct-to-consumer apparel, intimates, and accessories brand in
North America for women sizes 10 to 30, today announced its
financial results for the quarter ended January 28, 2023.
Lisa Harper, Chief Executive Officer, stated, “This past year,
we focused on improving the health of our organization and made
operational changes that have set us up to drive long-term growth
in the business. I’m proud of our team’s accomplishments and we
ended the year with Net Sales at the upper end of our expectations,
a beat to our Adjusted EBITDA1 guidance, and improved inventory
levels going into next year. We are pleased with the quality of our
inventory and product moving forward, and we are starting to see
our gross margin rates stabilize. Looking ahead, I believe we have
the right strategies and priorities in place to deliver against
long-term financial targets and drive shareholder value.”
Financial Highlights for the Fourth Quarter of Fiscal
2022
- Net sales decreased 5.5% to $301.2 million compared to the
fourth quarter of last year. Comparable sales2 decreased 5.4% in
the fourth quarter.
- Gross profit margin was 31.9% and declined 70bps compared to
32.6% in the fourth quarter of last year. The decline was primarily
driven by promotional events and higher inflationary costs,
partially offset by higher royalties, profit-sharing and marketing
and promotional funds we received associated with our private label
credit card.
- Net loss was $3.8 million, or a loss of $0.04 per share,
compared to net loss of $22.8 million, or a loss of $0.21 per share
in the fourth quarter of last year. There was no adjustment to net
income in the fourth quarter of fiscal 2022, but for comparison
purposes, Adjusted net income1 for the fourth quarter of last year
was $9.7 million, or $0.09 per share.
- Adjusted EBITDA1 was $16.4 million, or 5.6% of net sales,
compared to $28.4 million, or 9.1% of net sales, in the fourth
quarter of last year.
- Opened six Torrid stores and six Curv stores in the fourth
quarter and closed two Torrid stores. The total store count at
quarter end was 639 stores.
Financial Highlights for the Full Year of Fiscal 2022
- Net sales decreased 0.7% to $1,288.1 million compared to last
fiscal year. Comparable sales2 decreased 3.4% compared to last
fiscal year.
- Gross profit margin was 35.7% compared to 41.4% last fiscal
year.
- Net income was $50.2 million, or $0.48 per share, compared to
net loss of $29.9 million, or a loss of $0.27 per share last fiscal
year. There was no adjustment to net income in fiscal 2022, but for
comparison purposes, Adjusted net income1 last fiscal year was
$121.2 million, or $1.10 per share.
- Adjusted EBITDA1 was $152.3 million, or 12.1% of net sales,
compared to $245.9 million, or 19.2% of net sales last fiscal
year.
- Opened 18 Torrid stores and eight Curv stores during fiscal
2022 and closed 11 Torrid stores. The total store count at year end
was 639 stores.
- Active customers grew 2% to 3.9 million.
- Average spend per customer was down 3%.
Reclassification of Certain Statements
of Operations and Comprehensive Income (Loss) Items
In the fourth quarter of fiscal 2022, we made a voluntary change
in our accounting policy regarding the classification of royalties,
profit-sharing and marketing and promotional funds ("PLCC Funds")
we receive pursuant to our private label credit card agreement.
Historically, we recorded PLCC Funds as a reduction to selling,
general and administrative expenses in the consolidated statements
of operations and comprehensive income (loss). Under the new
policy, we record PLCC Funds in net sales in the consolidated
statements of operations and comprehensive income (loss). This
reclassification does not have any impact on income from
operations, income before provision for income taxes, net income
(loss) or earnings (loss) per share and there was no cumulative
effect to stockholders’ deficit or net assets.
The recognition of PLCC Funds in net sales is preferable because
it will enhance the comparability of our financial statements with
those of many of our industry peers and provide greater
transparency into performance metrics relevant to our industry by
showing the gross impact of the funds received as net sales instead
of as a reduction to selling, general and administrative expenses.
This reclassification has been retrospectively applied to all
periods presented in this earnings release. A table reflecting the
effects of the reclassification is included at the end of this
release (see “Reclassification of Certain Statements of Operations
and Comprehensive Income (Loss) Items”).
Full Year Fiscal 2022 Financial and Operating Metrics
January 28, 2023
January 29, 2022
YoY Change
Active customers (as of end of
period)(A)
3,902
3,821
2%
Net sales per active customer(A)
$
330
$
340
(3%)
Net Sales
$
1,288,144
$
1,297,271
(2%)
Comparable sales(B)
(3%)
30%
Number of stores (as of end of period)
639
624
Net income (loss)
$
50,209
$
(29,944)
268%
Adjusted EBITDA(C)
$
152,350
$
245,853
(38%)
(A) Active customers and net sales per active customer calculated
on a preceding four quarters basis. (B)
The computation of comparable sales
includes results from stores that were temporarily closed due to
COVID-19.
(C)
Please refer to “Non-GAAP Reconciliations”
below for a reconciliation of net income (loss) to Adjusted
EBITDA.
Balance Sheet and Cash
Flow
Cash and cash equivalents at the end of fiscal 2022
totaled $13.6 million. Total liquidity at the end of the fourth
quarter, including available borrowing capacity under our revolving
credit agreement, was $147.8 million.
Cash flow from operations for the twelve-month period
ended January 28, 2023 was $53.3 million, compared to $121.2
million for the twelve-month period ended January 29, 2022.
Outlook
For the first quarter of fiscal 2023 the Company
expects:
- Net sales between $305 million and $313 million.
- Adjusted EBITDA1 between $35 million and $40 million.
For the full year fiscal 2023 the Company expects:
- Net sales between $1.265 billion and $1.320 billion.
- Adjusted EBITDA1 between $140 million and $152 million.
- Capital expenditures between $40 and $45 million reflecting
infrastructure and technology investments as well as between 30 and
40 new stores for the year.
The above outlook is based on several assumptions, including,
but not limited to, the macroeconomic challenges in the industry
continuing into fiscal 2023 as well as higher raw material and
labor costs, which are expected to be more pronounced this year.
While COVID-19-related restrictions have eased in recent months, a
level of uncertainty remains regarding potential supply chain
disruption during fiscal 2023. See “Forward-Looking Statements” for
additional information.
Conference Call Details
A conference call to discuss the Company’s fourth quarter fiscal
2022 results is scheduled for March 23, 2023, at 4:30 p.m. ET.
Those who wish to participate in the call may do so by dialing
(877) 407-9208 or (201) 493-6784 for international callers. The
conference call will also be webcast live at investors.torrid.com
in the Events and Presentations section. A recording will be
available shortly after the conclusion of the call. To access the
replay, please dial (844) 512-2921 or (412) 317-6671 for
international callers, conference ID 13735712. An archive of the
webcast will be available on Torrid’s investor relations
website.
Notes
(1)
Adjusted EBITDA and Adjusted net income
(loss) are non-GAAP financial measures. See “Non-GAAP Financial
Measures” and “Non-GAAP Reconciliations” for additional information
on non-GAAP financial measures and the accompanying tables for a
reconciliation to the most comparable GAAP measures. The Company
does not provide reconciliations of the forward-looking non-GAAP
measures of Adjusted EBITDA to the most directly comparable
forward-looking GAAP measure because the timing and amount of
excluded items are unreasonably difficult to fully and accurately
estimate. For the same reasons, the Company is unable to address
the probable significance of the unavailable information, which
could be material to future results.
(2)
Comparable sales for any given period are
defined as the sales of Torrid’s e-Commerce operations and stores
that it has included in its comparable sales base during that
period. The Company includes a store in its comparable sales base
after it has been open for 15 full fiscal months. If a store is
closed during a fiscal year, it is only included in the computation
of comparable sales for the full fiscal months in which it was
open. The computation of comparable sales includes results from
stores that were temporarily closed due to COVID-19. Partial fiscal
months are excluded from the computation of comparable sales.
Comparable sales allow the Company to evaluate how its unified
commerce business is performing exclusive of the effects of new
store openings. The Company applies current year foreign currency
exchange rates to both current year and prior year comparable sales
to remove the impact of foreign currency fluctuation and achieve a
consistent basis for comparison.
About Torrid
Torrid is a direct-to-consumer brand of apparel, intimates and
accessories in North America targeting the 25- to 40-year old woman
who wears sizes 10 to 30. Torrid is focused on fit and offers high
quality products across a broad assortment that includes tops,
bottoms, denim, dresses, intimates, activewear, footwear and
accessories.
Non-GAAP Financial Measures
In addition to results determined in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”), management utilizes certain non-GAAP performance measures
such as Adjusted EBITDA, Adjusted net income (loss), and Adjusted
earnings (loss) per share for purposes of evaluating ongoing
operations and for internal planning and forecasting purposes. We
believe that these non-GAAP operating measures, when reviewed
collectively with our GAAP financial information, provide useful
supplemental information to investors in assessing our operating
performance.
Adjusted EBITDA, Adjusted net income (loss), and Adjusted
earnings (loss) per share are supplemental measures of our
operating performance that are neither required by, nor presented
in accordance with, GAAP and our calculations thereof may not be
comparable to similarly titled measures reported by other
companies. Adjusted EBITDA represents GAAP net income (loss) plus
interest expense less interest income, net of other expense
(income), plus provision for income taxes, depreciation and
amortization (“EBITDA”), and share-based compensation, non-cash
deductions and charges, and other expenses. Adjusted net income
(loss) represents GAAP net income (loss) plus remeasurement
adjustments for share-based compensation, net of tax. Adjusted
earnings (loss) per share represents Adjusted net income (loss)
divided by the diluted weighted average number of shares
outstanding at the end of the period.
We believe Adjusted EBITDA, Adjusted net income (loss), and
Adjusted earnings (loss) per share facilitate operating performance
comparisons from period to period by isolating the effects of
certain items that vary from period to period without any
correlation to ongoing operating performance. We also use Adjusted
EBITDA as one of the primary methods for planning and forecasting
the overall expected performance of our business and for evaluating
on a quarterly and annual basis actual results against such
expectations.
Further, we recognize Adjusted EBITDA as a commonly used measure
in determining business value and, as such, use it internally to
report and analyze our results and as a benchmark to determine
certain non-equity incentive payments made to executives. We use
Adjusted net income (loss) and Adjusted earnings (loss) per share
to facilitate operating performance comparisons by isolating the
effects of share-based compensation that vary from period to period
and across our peer companies without any correlation to ongoing
operating performance.
Adjusted EBITDA, Adjusted net income (loss), and Adjusted
earnings (loss) per share have limitations as analytical tools.
These measures are not measurements of our financial performance
under GAAP and should not be considered in isolation or as
alternatives to or substitutes for net income (loss), income (loss)
from operations, earnings (loss) per share or any other performance
measures determined in accordance with GAAP or as alternatives to
cash flows from operating activities as a measure of our liquidity.
Our presentation of Adjusted EBITDA, Adjusted net income (loss),
and Adjusted earnings (loss) per share should not be construed as
an inference that our future results will be unaffected by unusual
or non-recurring items.
Forward-Looking Statements
Certain statements made in this release are “forward looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, and are subject to the “safe harbor”
provisions of the United States Private Securities Litigation
Reform Act of 1995. When used in this press release, the words
“estimates,” “projected,” “expects,” “anticipates,” “forecasts,”
“plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,”
“future,” “propose” and variations of these words or similar
expressions (or the negative versions of such words or expressions)
are intended to identify forward-looking statements. You can
identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. For example, all
statements we make relating to our expected first quarter of fiscal
2023, our full year fiscal 2023 performance and our plans and
objectives for future operations, growth or initiatives are
forward-looking statements. These forward-looking statements are
not guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
Torrid’s control, that could cause actual results or outcomes to
differ materially from those discussed in the forward-looking
statements, including: changes in consumer spending and general
economic conditions; including as a result of rising interest
rates; inflationary pressures with respect to labor and raw
materials and global supply chain constraints that could increase
our expenses; our ability to identify and respond to new and
changing product trends, customer preferences and other related
factors; our dependence on a strong brand image; damage to our
reputation arising from our use of social media, email and text
messages; increased competition from other brands and retailers;
our reliance on third parties to drive traffic to our website; the
success of the shopping centers in which our stores are located;
our ability to adapt to consumer shopping preferences and develop
and maintain a relevant and reliable omni-channel experience for
our customers; our dependence upon independent third parties for
the manufacture of all of our merchandise; availability constraints
and price volatility in the raw materials used to manufacture our
products; interruptions of the flow of our merchandise from
international manufacturers causing disruptions in our supply
chain; our sourcing a significant amount of our products from
China; shortages of inventory, delayed shipments to our e-Commerce
customers and harm to our reputation due to difficulties or
shut-down of our distribution facility (including as a result of
COVID-19); our reliance upon independent third-party transportation
providers for substantially all of our product shipments; our
growth strategy; our failure to attract and retain employees that
reflect our brand image, embody our culture and possess the
appropriate skill set; our reliance on third-parties for the
provision of certain services, including real estate management;
our ability to successfully manage risks relating to the spread of
COVID-19, including any adverse impacts on our supply chain,
workforce, facilities, customer services and operations; our
dependence upon key members of our executive management team; our
reliance on information systems; system security risk issues that
could disrupt our internal operations or information technology
services; unauthorized disclosure of sensitive or confidential
information, whether through a breach of our computer system or
otherwise; our failure to comply with federal and state laws and
regulations and industry standards relating to privacy, data
protection, advertising and consumer protection; payment-related
risks that could increase our operating costs or subject us to
potential liability; claims made against us resulting in
litigation; changes in laws and regulations applicable to our
business; regulatory actions or recalls arising from issues with
product safety; our inability to protect our trademarks or other
intellectual property rights; our substantial indebtedness and
lease obligations; restrictions imposed by our indebtedness on our
current and future operations; changes in tax laws or regulations
or in our operations that may impact our effective tax rate; the
possibility that we may recognize impairments of long-lived assets;
our failure to maintain adequate internal control over financial
reporting; and the threat of war, terrorism or other catastrophes
that could negatively impact our business.
The outcome of the events described in any of our
forward-looking statements are also subject to risks, uncertainties
and other factors described in the sections entitled “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in our Annual Report on Form 10-K filed
with the Securities and Exchange Commission (“SEC”) on March 30,
2022 and in our other filings with the SEC. You should evaluate all
forward-looking statements made in this communication in the
context of these risks and uncertainties.
We derive many of our forward-looking statements from our
operating budgets and forecasts, which are based upon many detailed
assumptions. While we believe that our assumptions are reasonable,
we caution that it is very difficult to predict the effect of known
factors, and it is impossible for us to anticipate all factors that
could affect our actual results. We caution you that the important
factors referenced above may not contain all of the factors that
are important to you. In addition, we cannot assure you that we
will realize the results or developments we expect or anticipate
or, even if substantially realized, that they will result in the
consequences or affect us or our operations in the way we
expect.
The forward-looking statements included in this press release
are made only as of the date hereof. We undertake no obligation to
publicly update or revise any forward-looking statement as a result
of new information, future events or otherwise. Our forward-looking
statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or
investments.
TORRID HOLDINGS INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(In thousands, except per
share data)
Three Months Ended
Twelve Months Ended
January 28,
2023
January 29,
2022
January 28,
2023
January 29,
2022
Net sales
$
301,228
$
318,414
$
1,288,144
$
1,297,271
Cost of goods sold
205,049
214,767
828,605
759,826
Gross profit
96,179
103,647
459,539
537,445
Selling, general and administrative
expenses
77,837
70,057
297,973
439,409
Marketing expenses
15,827
17,378
59,941
52,654
Income from operations
2,515
16,212
101,625
45,382
Interest expense
8,385
6,107
29,736
29,497
Interest income, net of other (income)
expense
(16
)
128
207
56
(Loss) income before provision for income
taxes
(5,854
)
9,977
71,682
15,829
(Benefit from) provision for income
taxes
(2,010
)
32,731
21,473
45,773
Net (loss) income
$
(3,844
)
$
(22,754
)
$
50,209
$
(29,944
)
Comprehensive income (loss):
Net (loss) income
$
(3,844
)
$
(22,754
)
$
50,209
$
(29,944
)
Other comprehensive income (loss)
Foreign currency translation
adjustment
143
(151
)
(337
)
84
Total other comprehensive income
(loss)
143
(151
)
(337
)
84
Comprehensive (loss) income
$
(3,701
)
$
(22,905
)
$
49,872
$
(29,860
)
Net (loss) earnings per share:
Basic
$
(0.04
)
$
(0.21
)
$
0.48
$
(0.27
)
Diluted
$
(0.04
)
$
(0.21
)
$
0.48
$
(0.27
)
Weighted average number of
shares:
Basic
103,693
109,445
104,342
109,886
Diluted
103,693
109,445
104,489
109,886
TORRID HOLDINGS INC.
CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(In thousands, except share
and per share data)
January 28, 2023
January 29, 2022
Assets
Current assets:
Cash and cash equivalents
$
13,569
$
29,025
Restricted cash
366
262
Inventory
180,055
170,608
Prepaid expenses and other current
assets
20,050
14,686
Prepaid income taxes
2,081
6,345
Total current assets
216,121
220,926
Property and equipment, net
113,613
127,565
Operating lease right-of-use assets
177,179
209,637
Deposits and other noncurrent assets
8,650
7,100
Deferred tax assets
3,301
4,873
Intangible asset
8,400
8,400
Total assets
$
527,264
$
578,501
Liabilities and stockholders'
deficit
Current liabilities:
Accounts payable
$
76,207
$
77,448
Accrued and other current liabilities
108,847
138,708
Operating lease liabilities
45,008
45,716
Borrowings under credit facility
8,380
—
Current portion of term loan
16,144
20,519
Due to related parties
12,741
14,622
Total current liabilities
267,327
297,013
Noncurrent operating lease liabilities
172,103
207,049
Term loan
304,697
320,841
Deferred compensation
4,246
6,873
Other noncurrent liabilities
9,115
5,044
Total liabilities
757,488
836,820
Commitments and contingencies (Note
16)
Stockholders' deficit:
Common shares: $0.01 par value;
1,000,000,000 shares authorized; 103,774,813 shares issued and
outstanding at January 28, 2023; 107,857,625 shares issued and
outstanding at January 29, 2022
1,038
1,078
Additional paid-in capital
128,205
118,286
Accumulated deficit
(359,206
)
(377,759
)
Accumulated other comprehensive (loss)
income
(261
)
76
Total stockholders' deficit
(230,224
)
(258,319
)
Total liabilities and stockholders'
deficit
$
527,264
$
578,501
TORRID HOLDINGS INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
(In thousands)
Twelve Months Ended
January 28, 2023
January 29, 2022
OPERATING ACTIVITIES
Net income (loss)
$
50,209
$
(29,944
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Write down of inventory
2,297
696
Operating right-of-use assets
amortization
41,839
41,648
Depreciation and other amortization
37,592
36,748
Write off of unamortized original issue
discount and deferred financing costs for Amended Term Loan Credit
Agreement
—
5,231
Share-based compensation
9,980
159,754
Deferred taxes
1,863
1,266
Other
(1,209
)
(457
)
Changes in operating assets and
liabilities:
Inventory
(12,028
)
(65,709
)
Prepaid expenses and other current
assets
(5,364
)
(1,949
)
Prepaid income taxes
4,264
(5,928
)
Deposits and other noncurrent assets
(1,712
)
(3,058
)
Accounts payable
(1,241
)
5,639
Accrued and other current liabilities
(29,659
)
28,090
Operating lease liabilities
(42,912
)
(49,597
)
Other noncurrent liabilities
3,900
1,222
Deferred compensation
(2,627
)
342
Due to related parties
(1,881
)
6,562
Income taxes payable
—
(9,336
)
Net cash provided by operating
activities
53,311
121,220
INVESTING ACTIVITIES
Purchases of property and equipment
(23,369
)
(17,552
)
Net cash used in investing activities
(23,369
)
(17,552
)
FINANCING ACTIVITIES
Capital distribution to Torrid Holding
LLC
—
(300,000
)
Proceeds from revolving credit
facility
832,635
5,700
Payments on revolving credit facility
(824,255
)
(5,700
)
Deferred financing costs for revolving
credit facility
—
(688
)
Principal payments on New Term Loan Credit
Agreement and repayment of Amended Term Loan Credit Agreement and
related costs
(21,875
)
(212,775
)
Proceeds from New Term Loan Credit
Agreement, net of original issue discount and deferred financing
costs
—
340,509
Proceeds from issuances under share-based
compensation plans
746
569
Withholding tax payments related to
vesting of restricted stock units and awards
(668
)
(2,072
)
Repurchases and retirement of common
stock
(31,700
)
(23,352
)
Net cash used in financing activities
(45,117
)
(197,809
)
Effect of foreign currency exchange rate
changes on cash, cash equivalents and restricted cash
(177
)
213
(Decrease) increase in cash, cash
equivalents and restricted cash
(15,352
)
(93,928
)
Cash, cash equivalents and restricted cash
at beginning of period
29,287
123,215
Cash, cash equivalents and restricted cash
at end of period
$
13,935
$
29,287
SUPPLEMENTAL INFORMATION
Cash paid during the period for interest
related to the revolving credit facility and term loan
$
29,564
$
24,120
Cash paid during the period for income
taxes
$
15,601
$
58,134
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Property and equipment purchases included
in accounts payable and accrued liabilities
$
3,959
$
3,338
Reclassification of Certain Statements of Operations and
Comprehensive Income (Loss) Items
In the fourth quarter of fiscal 2022, we made a voluntary change
in our accounting policy regarding the classification of royalties,
profit-sharing and marketing and promotional funds ("PLCC Funds")
we receive pursuant to our private label credit card agreement.
Historically, we recorded PLCC Funds as a reduction to selling,
general and administrative expenses in the consolidated statements
of operations and comprehensive income (loss). Under the new
policy, we record PLCC Funds in net sales in the consolidated
statements of operations and comprehensive income (loss). This
reclassification does not have any impact on income from
operations, income (loss) before provision for income taxes, net
income (loss) or earnings (loss) per share and there was no
cumulative effect to stockholders’ deficit or net assets.
The recognition of PLCC Funds in net sales is preferable because
it will enhance the comparability of our financial statements with
those of many of our industry peers and provide greater
transparency into performance metrics relevant to our industry by
showing the gross impact of the funds received as net sales instead
of as a reduction to selling, general and administrative expenses.
The following tables show this change in presentation which has
been retrospectively applied to all prior periods presented in this
earnings release.
Three Months Ended January 28,
2023
Prior to PLCC Funds
Reclass
Change in
Accounting
Principle
As Reported
Net sales
$
294,817
$
6,411
$
301,228
Cost of goods sold
205,049
—
205,049
Gross profit
89,768
6,411
96,179
Selling, general and administrative
expenses
71,426
6,411
77,837
Marketing expenses
15,827
—
15,827
Income from operations
$
2,515
$
—
$
2,515
Three Months Ended January 29,
2022
As Previously Reported
Change in
Accounting
Principle
As Reported
Net sales
$
313,936
$
4,713
$
318,649
Cost of goods sold
214,767
—
214,767
Gross profit
99,169
4,713
103,882
Selling, general and administrative
expenses
65,579
4,713
70,292
Marketing expenses
17,378
—
17,378
Income from operations
$
16,212
$
—
$
16,212
Twelve Months Ended January
28, 2023
Prior to PLCC Funds
Reclass
Change in
Accounting
Principle
As Reported
Net sales
$
1,254,136
$
34,008
$
1,288,144
Cost of goods sold
828,605
—
828,605
Gross profit
425,531
34,008
459,539
Selling, general and administrative
expenses
263,965
34,008
297,973
Marketing expenses
59,941
—
59,941
Income from operations
$
101,625
$
—
$
101,625
Twelve Months Ended January
29, 2022
As Previously Reported
Change in
Accounting
Principle
As Reported
Net sales
$
1,278,794
$
18,477
$
1,297,271
Cost of goods sold
759,826
—
759,826
Gross profit
518,968
18,477
537,445
Selling, general and administrative
expenses
420,932
18,477
439,409
Marketing expenses
52,654
—
52,654
Income from operations
$
45,382
$
—
$
45,382
The following table shows the impact of this change in
accounting policy for all previously reported fiscal quarters
during fiscal years 2022 and 2021:
Three Months Ended
As Previously Reported
January 28, 2023(A)
October 29, 2022
July 30, 2022
April 30, 2022
January 29, 2022
October 30, 2021
July 31, 2021
May 1, 2021
Net sales
$
294,817
$
290,034
$
340,876
$
328,409
$
313,936
$
306,241
$
332,870
$
325,747
Cost of goods sold
205,049
198,263
222,030
203,263
214,767
181,094
183,150
180,815
Gross profit
89,768
91,771
118,846
125,146
99,169
125,147
149,720
144,932
Selling, general and administrative
expenses
71,426
59,180
65,928
67,431
65,579
66,399
179,041
109,913
Marketing expenses
15,827
12,638
13,502
17,974
17,378
15,023
10,728
9,525
Income (loss) from operations
$
2,515
$
19,953
$
39,416
$
39,741
$
16,212
$
43,725
$
(40,049
)
$
25,494
Adjustment
Net sales
$
6,411
$
10,167
$
12,646
$
4,784
$
4,713
$
4,649
$
4,637
$
4,478
Cost of goods sold
—
—
—
—
—
—
—
—
Gross profit
6,411
10,167
12,646
4,784
4,713
4,649
4,637
4,478
Selling, general and administrative
expenses
6,411
10,167
12,646
4,784
4,713
4,649
4,637
4,478
Marketing expenses
—
—
—
—
—
—
—
—
Income (loss) from operations
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
As Reported
Net sales
$
301,228
$
300,201
$
353,522
$
333,193
$
318,649
$
310,890
$
337,507
$
330,225
Cost of goods sold
205,049
198,263
222,030
203,263
214,767
181,094
183,150
180,815
Gross profit
96,179
101,938
131,492
129,930
103,882
129,796
154,357
149,410
Selling, general and administrative
expenses
77,837
69,347
78,574
72,215
70,292
71,048
183,678
114,391
Marketing expenses
15,827
12,638
13,502
17,974
17,378
15,023
10,728
9,525
Income (loss) from operations
$
2,515
$
19,953
$
39,416
$
39,741
$
16,212
$
43,725
$
(40,049
)
$
25,494
__________________________ (A)
The amounts for the three months ended
January 28, 2023 have not been previously reported.
Non-GAAP Reconciliations
The following table provides a reconciliation of Net (loss)
income to Adjusted EBITDA for the periods presented (dollars in
thousands):
Three Months Ended
Twelve Months Ended
January 28, 2023
January 29, 2022
January 28, 2023
January 29, 2022
Net (loss) income
$
(3,844
)
$
(22,754
)
$
50,209
$
(29,944
)
Interest expense
8,385
6,107
29,736
29,497
Interest income, net of other (income)
expense
(16
)
128
207
56
(Benefit from) provision for income
taxes
(2,010
)
32,731
21,473
45,773
Depreciation and amortization(A)
9,093
9,578
36,074
35,204
Share-based compensation(B)
2,412
2,516
9,980
159,754
Non-cash deductions and charges(C)
183
239
2,493
615
Other expenses(D)
2,170
(98
)
2,178
4,898
Adjusted EBITDA
$
16,373
$
28,447
$
152,350
$
245,853
__________________________ (A)
Depreciation and amortization excludes
amortization of debt issuance costs and original issue discount
that are reflected in interest expense.
(B)
Prior to the consummation of our IPO on
July 6, 2021, share-based compensation was determined based on the
remeasurement of our liability-classified incentive units.
(C)
Non-cash deductions and charges includes
losses on property and equipment disposals and the net impact of
non-cash rent expense.
(D)
Other expenses include IPO-related
transaction fees, severance costs for certain key management
positions and the reimbursement of certain management expenses,
primarily for travel, incurred by Sycamore on our behalf, which are
not considered to be part of our core business.
The following table provides a reconciliation of Net (loss)
income to Adjusted net (loss) income for the periods presented (in
thousands, except per share data):
Three Months Ended
Twelve Months Ended
January 28, 2023
January 29, 2022
January 28, 2023
January 29, 2022
Net (loss) income
$
(3,844
)
$
(22,754
)
$
50,209
$
(29,944
)
Remeasurement adjustments for incentive
units
—
—
—
151,166
(Benefit from) provision for income
taxes
(2,010
)
32,731
21,473
45,773
Adjusted provision for income taxes(A)
2,010
(323
)
(21,473
)
(45,773
)
Adjusted net (loss) income
$
(3,844
)
$
9,654
$
50,209
$
121,222
Net (loss) earnings per share:
Basic
$
(0.04
)
$
(0.21
)
$
0.48
$
(0.27
)
Diluted
$
(0.04
)
$
(0.21
)
$
0.48
$
(0.27
)
Adjusted net (loss) earnings per
share:
Basic
$
(0.04
)
$
0.09
$
0.48
$
1.10
Diluted
$
(0.04
)
$
0.09
$
0.48
$
1.10
Weighted average number of
shares:
Basic
103,693
109,445
104,342
109,886
Diluted
103,693
109,445
104,489
109,886
__________________________ (A)
Represents the non-GAAP Adjusted provision for income taxes that
excludes the fiscal 2021 full year impact of the $151.2 million
remeasurement adjustments for incentive units.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230323005648/en/
Investors Paula Dempsey IR@torrid.com
Media Joele Frank, Wilkinson Brimmer Katcher Michael
Freitag / Arielle Rothstein / Lyle Weston Media@torrid.com
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