www.torrid.com<\/a> and its stores in the United States of America, Puerto Rico and Canada.<\/p>\nNon-GAAP Financial Measures<\/b><\/p>\n
\nIn addition to results determined in accordance with accounting principles generally accepted in the United States of America (\u201cGAAP\u201d), management utilizes certain non-GAAP performance measures, such as Adjusted EBITDA, for purposes of evaluating ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP operating measures, when reviewed collectively with our GAAP financial information, provide useful supplemental information to investors in assessing our operating performance.<\/p>\n
\nAdjusted EBITDA is a supplemental measure of our operating performance that is neither required by, nor presented in accordance with, GAAP and our calculations thereof may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA represents GAAP net income (loss) plus interest expense less interest income, net of other expense (income), plus provision for income taxes, depreciation and amortization (\u201cEBITDA\u201d), and share-based compensation, non-cash deductions and charges, and other expenses<\/p>\n
\nWe believe Adjusted EBITDA facilitates operating performance comparisons from period to period by isolating the effects of certain items that vary from period to period without any correlation to ongoing operating performance. We also use Adjusted EBITDA as one of the primary methods for planning and forecasting the overall expected performance of our business and for evaluating on a quarterly and annual basis, actual results against such expectations.<\/p>\n
\nFurther, we recognize Adjusted EBITDA as a commonly used measure in determining business value and, as such, use it internally to report and analyze our results and as a benchmark to determine certain non-equity incentive payments made to executives.<\/p>\n
\nAdjusted EBITDA has limitations as an analytical tool. This measure is not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to or substitute for net income (loss), income (loss) from operations, earnings (loss) per share or any other performance measures determined in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.<\/p>\n
Forward-Looking Statements<\/b><\/p>\n
\nCertain statements made in this earnings release are \u201cforward-looking statements\u201d within the meaning of Section 27A of the Securities Act of 1933, as amended (the \u201cSecurities Act\u201d) and Section 21E of the Securities Exchange Act of 1934, as amended (the \u201cExchange Act\u201d), and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this earnings release are forward-looking statements. Forward-looking statements reflect our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as \u201canticipate,\u201d \u201cestimate,\u201d \u201cexpect,\u201d \u201cproject,\u201d \u201cplan,\u201d \u201cintend,\u201d \u201cbelieve,\u201d \u201cmay,\u201d \u201cwill,\u201d \u201cshould,\u201d \u201ccan have,\u201d \u201clikely\u201d and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology).<\/p>\n
\nFor example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those that we expected, including:<\/p>\n
\n\u2022 the adverse impact of rulemaking changes implemented by the Consumer Financial Protection Bureau on our income streams, profitability and results of operations;<\/p>\n
\n\u2022 changes in consumer spending and general economic conditions;<\/p>\n
\n\u2022 the negative impact on interest expense as a result of steep interest rates;<\/p>\n
\n\u2022 inflationary pressures with respect to labor and raw materials and global supply chain constraints that could increase our expenses;<\/p>\n
\n\u2022 our ability to identify and respond to new and changing product trends, customer preferences and other related factors;<\/p>\n
\n\u2022 our dependence on a strong brand image;<\/p>\n
\n\u2022 increased competition from other brands and retailers;<\/p>\n
\n\u2022 our reliance on third parties to drive traffic to our website;<\/p>\n
\n\u2022 the success of the shopping centers in which our stores are located;<\/p>\n
\n\u2022 our ability to adapt to consumer shopping preferences and develop and maintain a relevant and reliable omni-channel experience for our customers;<\/p>\n
\n\u2022 our dependence upon independent third parties for the manufacture of all of our merchandise;<\/p>\n
\n\u2022 availability constraints and price volatility in the raw materials used to manufacture our products;<\/p>\n
\n\u2022 interruptions of the flow of our merchandise from international manufacturers causing disruptions in our supply chain;<\/p>\n
\n\u2022 our sourcing a significant amount of our products from China;<\/p>\n
\n\u2022 shortages of inventory, delayed shipments to our e-Commerce customers and harm to our reputation due to difficulties or shut-down of our distribution facility;<\/p>\n
\n\u2022 our reliance upon independent third-party transportation providers for substantially all of our product shipments;<\/p>\n
\n\u2022 our growth strategy;<\/p>\n
\n\u2022 our failure to attract and retain employees that reflect our brand image, embody our culture and possess the appropriate skill set;<\/p>\n
\n\u2022 damage to our reputation arising from our use of social media, email and text messages;<\/p>\n
\n\u2022 our reliance on third-parties for the provision of certain services, including real estate management;<\/p>\n
\n\u2022 our dependence upon key members of our executive management team;<\/p>\n
\n\u2022 our reliance on information systems;<\/p>\n
\n\u2022 system security risk issues that could disrupt our internal operations or information technology services;<\/p>\n
\n\u2022 unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer system, third-party computer systems we rely on, or otherwise;<\/p>\n
\n\u2022 our failure to comply with federal and state laws and regulations and industry standards relating to privacy, data protection, advertising and consumer protection;<\/p>\n
\n\u2022 payment-related risks that could increase our operating costs or subject us to potential liability;<\/p>\n
\n\u2022 claims made against us resulting in litigation;<\/p>\n
\n\u2022 changes in laws and regulations applicable to our business;<\/p>\n
\n\u2022 regulatory actions or recalls arising from issues with product safety;<\/p>\n
\n\u2022 our inability to protect our trademarks or other intellectual property rights;<\/p>\n
\n\u2022 our substantial indebtedness and lease obligations;<\/p>\n
\n\u2022 restrictions imposed by our indebtedness on our current and future operations;<\/p>\n
\n\u2022 changes in tax laws or regulations or in our operations that may impact our effective tax rate;<\/p>\n
\n\u2022 the possibility that we may recognize impairments of long-lived assets;<\/p>\n
\n\u2022 our failure to maintain adequate internal control over financial reporting; and<\/p>\n
\n\u2022 the threat of war, terrorism or other catastrophes, including natural disasters, that could negatively impact our business.<\/p>\n
\nThe outcome of the events described in any of our forward-looking statements are also subject to risks, uncertainties and other factors described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on April 2, 2024 and in our other filings with the SEC and public communications. You should evaluate all forward-looking statements made in this earnings release in the context of these risks and uncertainties.<\/p>\n
\nWe caution you that the important factors referenced above may not include all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the outcomes or affect us or our operations in the way we expect. The forward-looking statements included in this earnings release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise except to the extent required by law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.<\/p>\n
\nInvestors and others should note that we may announce material information to our investors using our investor relations website (https:\/\/investors.torrid.com<\/a>), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media, to communicate with our investors and the public about our company, our business and other issues. It is possible that the information that we post on social media could be deemed to be material information. We therefore encourage investors to visit these websites from time to time. The information contained on such websites and social media posts is not incorporated by reference into this filing. Further, our references to website URLs in this filing are intended to be inactive textual references only.<\/p>\n