Why Torrid Holdings Collapsed 23.5% at the Open Today
Shares of women's clothing retailer Torrid Holdings (NYSE: CURV) fell dramatically at the open on Dec. 9, declining a painful 23.5% at one point in the first hour of trading. The big news, which came out after the close on Dec. 8, was the company's third-quarter earnings release. On the surface the results weren't that bad, but the update contained one really big red flag that gets investors into a glass-half-empty mood.
Torrid's third-quarter 2021 sales came in at $306.2 million, up 13% from the previous year and 19% compared to the same quarter of 2019, before the coronavirus pandemic. Although Wall Street analysts had been looking for something in the $311 million range, the company is clearly still growing. Notably, same-store sales rose 14% year over year, which is a very strong number, and the company opened 11 new stores in the quarter. On the bottom line, Torrid reported adjusted earnings of $0.25 per share in the third quarter, up from $0.17 in 2020 and above the $0.22 per share analysts had been projecting. Normally, an earnings beat like that would be seen as a big positive.
Image source: Getty Images.
Source Fool.com
