Lorraine Hutchinson, an analyst from Bank of America Securities, reiterated the Buy rating on Torrid Holdings. The associated price target was lowered to $2.00.
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Lorraine Hutchinson has given her Buy rating due to a combination of factors, primarily focusing on the expected recovery in sales and margins by 2026. Despite Torrid Holdings facing execution challenges, particularly in their tops category, management has taken swift action to address these issues, which is anticipated to lead to a rebound in performance.
Additionally, the company is undergoing store optimization, planning to close 180 net stores in fiscal year 2025, which is expected to significantly enhance EBITDA margins by 2026. The reintroduction of footwear, which had previously been removed due to tariff concerns, has shown promising results, further supporting the positive outlook. While current sales are impacted by assortment issues and higher promotions, the strategic measures in place are expected to drive a turnaround, justifying the Buy rating.