Torrid Holdings Shares Plunge Following Disappointing Earnings Report

Torrid Holdings US89142B1070

Shares of the plus-size apparel retailer Torrid Holdings came under significant selling pressure last week. The catalyst was a quarterly earnings report that fell short of market expectations, coupled with a sharp reduction in the company's full-year guidance, prompting several analysts to slash their price targets.

For the third quarter of its fiscal 2025, Torrid Holdings reported a net loss of $6.4 million, or $0.06 per share. This performance was notably worse than the $0.02 per share loss analysts had anticipated and also represented a deterioration from the same period a year earlier. Net revenue declined by 10.8% to $235.2 million.

In light of these weak results, management was compelled to substantially revise its annual forecast downward. For the full 2025 fiscal year, Torrid now anticipates revenue in the range of $995 million to $1.002 billion, a reduction from its prior guidance of $1.015 billion to $1.030 billion. The company also slashed its adjusted EBITDA forecast, now expecting between $59 million and $62 million, down from the previous $80 million to $90 million range.

Management Response and Analyst Reactions

CEO Lisa Harper attributed the company's underperformance to "assortment imbalances." As a strategic countermeasure to improve profitability, Torrid announced plans to close as many as 180 store locations.

The financial update triggered immediate reactions from Wall Street. Analysts at Bank of America Securities maintained their "Buy" rating on the stock but dramatically cut their price target in half, from $6.00 to $2.00. Similarly, Telsey Advisory Group reduced its target from $3.00 to $2.00 while keeping a "Market Perform" rating. The current consensus rating among eight covering firms is "Reduce."

Investor attention will now shift to the upcoming release of Torrid's fourth-quarter and full-year 2025 results. The market will be closely watching the management team's execution of its announced operational adjustments at that time.