CURV Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Sales: $231.7 million, down from $262.8 million year-over-year.

Comparable Sales: Declined 6.3% in Q2, with a notable improvement in July.

Adjusted EBITDA: $23.3 million (10% margin), or $12.1 million (5.2% margin) excluding a tariff refund benefit.

Net Income: $5.2 million ($0.05 per share), up from $1.6 million ($0.02 per share) last year.

Gross Margin: 38.7%, improved from 35.6% a year ago; excluding tariff benefits, it was 33.9%.

SG&A Expenses: Decreased to $61.9 million from $70.5 million, reflecting cost savings from store optimization.

Cash Position: $22 million in cash, with $39.7 million drawn on the revolving credit facility.

2Strategic Updates and Business Highlights

Customer Growth Agenda: Focus on acquiring, reactivating, and retaining customers, with positive trends noted in July and August.

Product Performance: Strength in knits, shorts, and dresses; footwear is expected to turn from a headwind to a tailwind in the second half.

Sub-brands: Year-to-date growth of approximately 74%, with expectations to reach $110 million in 2026.

Marketing Initiatives: Significant improvements in marketing efficiency, with a focus on personalized engagement and a successful relaunch of the Casting Call platform.

Marketplace Expansion: New partnerships with Macy's, Target, and Walmart to enhance customer acquisition.

3Forward Guidance and Outlook

Full-Year Sales Projection: $940 million to $960 million.

Adjusted EBITDA Outlook: Raised to $76 million to $86 million, reflecting tariff refunds; excluding this, the outlook remains at $65 million to $75 million.

Q3 Expectations: Net sales projected at $230 million to $235 million and adjusted EBITDA of $15 million to $20 million.

Tariff Impact: Anticipated tariffs of 12% to 15% in the second half, with plans to file for additional refunds estimated at $1.5 million to $2.5 million.

4Bad News, Challenges, or Points of Concern

Comparable Sales Decline: A 6.3% drop in Q2 raises concerns about overall consumer spending and market conditions, particularly in June.

Footwear as a Headwind: Continued challenges in the footwear category impacted sales, although improvements are expected in the second half.

Macro Economic Factors: Elevated gas prices and seasonal factors negatively affected discretionary spending in June.

Store Closures: While customer retention through closures has been strong, the ongoing reduction in store count may impact brand visibility and customer access.

5Notable Q&A Insights

July Inflection: Improvement in sales was attributed to increased traffic and conversion across all marketing channels, with digital customer reactivation showing positive results.

Gross Margin Recovery: Future margin improvements are expected from better sourcing strategies and a focus on customer acquisition, which should alleviate discounting pressures.

Sub-brand Performance: Sub-brands are driving both customer acquisition and increased spending among existing customers, with dedicated marketing plans in place to enhance this further. Overall, Torrid Holdings Inc. demonstrated a positive trajectory in Q2 2026, with strategic initiatives aimed at customer growth and improved marketing efficiency setting the stage for a stronger second half, despite facing challenges in comparable sales and macroeconomic pressures.