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CITY OF INDUSTRY, Calif. - Torrid Holdings Inc. (NYSE:CURV) announced the launch of an underwritten public offering of 10 million shares of common stock to be sold by certain stockholders, according to a press release statement. The selling stockholders plan to grant underwriters a 30-day option to purchase an additional 1.5 million shares. The announcement comes as InvestingPro data shows the stock trading at a P/E ratio of 51.1, with significant price volatility over the past year, having declined nearly 28% in the last 12 months.
The company will not receive any proceeds from the stock sale. With a current market capitalization of $531.4 million and an EBITDA of $77.6 million in the last twelve months, Torrid has agreed to repurchase $20 million of its shares from Sycamore Partners at the same price paid by underwriters in the offering. The repurchased shares will be held as treasury stock. According to InvestingPro analysis, the company maintains a Fair Value that suggests it may be slightly undervalued at current levels.
BofA Securities, Jefferies and William Blair are serving as joint lead book-running managers for the offering, with BTIG acting as book-running manager and Telsey Advisory Group as co-manager.
The offering will be made through a prospectus supplement and accompanying prospectus related to a registration statement on Form S-3 filed with the Securities and Exchange Commission on February 16, 2024.
Torrid is a direct-to-consumer brand in North America specializing in apparel for women in sizes 10 to 30. The company offers clothing, intimates, activewear, footwear, and accessories designed specifically for curvy women. With annual revenue of $1.09 billion and a gross profit margin of 36.7%, the company has maintained profitability despite challenging market conditions. Discover more detailed financial insights and 6 additional key ProTips for CURV with an InvestingPro subscription.
The concurrent repurchase is expected to close at the same time as the offering. While the offering is not conditioned on the completion of the repurchase, the repurchase depends on the offering’s closing.
In other recent news, Torrid Holdings Inc. reported its first-quarter 2025 earnings, revealing an earnings per share of $0.06, which exceeded analyst estimates of $0.04 and $0.05. However, the company reported revenue of $266 million, falling short of the expected $278.83 million. Torrid has revised its fiscal year 2025 guidance, lowering net sales expectations to between $1.030 billion and $1.055 billion, down from a previous range of $1.080 billion to $1.100 billion. Adjusted EBITDA projections were also reduced due to macroeconomic uncertainties and the discontinuation of Torrid’s shoe business. BofA Securities adjusted its outlook on Torrid Holdings, reducing the stock price target to $7.00 from $7.80, while maintaining a Buy rating, citing confidence in the company’s long-term strategy. Meanwhile, BTIG initiated coverage of Torrid with a neutral rating, highlighting the company’s dominant position in the plus-size apparel market and its ongoing business enhancements. The company is also planning to close 180 stores in 2025 as part of its digital transformation strategy, aiming to focus more on online sales. Torrid’s sub-brands have shown promising growth, with plans for further launches to capture a broader market.
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