Torrid Holdings (CURV) Stock Forecast & Price Target

Torrid Holdings is expected to continue its strong performance with an increase in adjusted EBITDA estimates for FY26, as its store optimization efforts are nearly complete and its multi-branded strategy gains momentum. The company's sub-brands drive incremental revenue and attract new customers, while cost-saving measures and a shift towards higher-return digital channels contribute to improved profitability. Risks to the company's performance include volatility in commodity costs, consumer spending, and currency rates, as well as potential supply chain disruptions and unfavorable government regulations.

Torrid Holdings is facing challenges in its operations, with declining sales and gross margins contracting by 360 bps YoY in the fourth quarter. In addition, the company's past execution missteps have led to a disruption in its top-selling categories, with mistakes in inventory strategy and product assortment resulting in lower comps and sales. While management has implemented measures to improve its performance, there is skepticism about its ability to drive growth and profitability, leading to a negative outlook on the company's stock.