Shares of Torrid Holdings Inc. have been on a (mostly) positive trajectory.
The price of shares in the City of Industry-based apparel manufacturer for plus-size women increased nearly 60% year over year as of Jan. 22, when it closed at $5.52.
The stock got a big boost last month after the company released its fiscal third-quarter earnings.
On Dec. 7, the stock closed at $4.15, and then increased by nearly 17% to close at $4.84 the following day. The company reported after the market closed on Dec. 7 a net loss of $2.7 million (-3 cents a share) for the quarter ending Oct. 28, compared with net income of $7.3 million (7 cents) in the same period of the previous year. Revenue decreased by 8.3% from the third quarter of the prior year to $275 million.
The stock saw its highest closing price of the past 52 weeks on Jan. 3 when it reached $6.35. That is a far cry from Sept. 13, when it hit its lowest closing price of the 52-week period of $1.23, 81% lower than the high seen earlier this month.
The stock closed at $5.14 on Jan. 25.
Lisa Harper, the chief executive of Torrid, said in a conference call with analysts on Dec. 7 that the “strong” quarterly results were due to demand experienced during the quarter for its clothing and other products sold at its more than 600 stores across the United States and in Canada.
Paula Dempsey, Torrid’s chief financial officer, said that senior management recognized the value impact the stores have on the company’s customers and business results.
“Over the last 12 months, we have seen a greater shift to customers acquired through stores approaching 2019 levels,” Dempsey said during the conference call. “The stores hold an important value in our customer journey, as it plays a pivotal role in converting single-channel customers to omni customers within the first year.”
The spending habits of omni customers – or those who shop at Torrid stores and online – are key to the company’s success, as they spend on average more than three-and-a-half times single-channel customers, she said.
“With that in mind, we remain focused on an integrated omnichannel strategy, seamlessly bridging our brick-and-mortar stores with our web business, creating a pleasant experience for our customers,” Dempsey added.
In addition, Torrid is making progress improving store profitability through diligent inventory management, streamlined supply chain and strategic labor management processes, she continued.
“We remain focused on delivering exceptional value to our customers while driving sustainable growth for our shareholders,” Dempsey said.
Discount stores
Amy Teske, an equity research associate at Baird Equity Research in Milwaukee, asked during the conference call about the company’s stores, and in particular about the clearance stores that Torrid opened in September.
“Were there any traffic trends here that were different from the balance of the chain?” Teske asked. “And is it attracting a different type of customer?”
Torrid’s chief commercial officer, Mark Mizicko, said traffic and customer trends at the three clearance stores were not meaningfully different.
“We didn’t really dissect it yet to see if there are differences in demographics going in, but the traffic trends were very similar,” Mizicko said. “It was just more of a makeup of what they were picking up that was driving (the sales at the clearance stores).”
