Torrid Holdings Inc.

Greetings and welcome to the Toward Holdings, Inc. Fourth Quarter Fiscal 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chinwe Abulu, Chief Accounting Officer. Thank you. You may begin.

Good afternoon, everyone, and thank you for joining Torrid's call today to discuss our financial results for the fourth quarter and full year of fiscal 2023, which we released this afternoon and can be found on our website at investors.torrid.com. With me today on the call are Lisa Harper, Torrid's Chief Executive Officer, Mark Mazzico, Torrid's Chief Commercial Officer, and Paula Dempsey. towards Chief Financial Officer. Before we get started, I would like to remind you of the company's Safe Harbor language, which I'm sure you're familiar with. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements may include, but are not limited to, statements containing the words expect, believe, plan, anticipate, will, may, should, estimate, and other words in terms of similar meaning. All forward-looking statements are based on current expectations and assumptions as of today, March 28, 2024. These statements are subject to risks and uncertainties that could cause actual results to differ materially. For further discussion of risks related to our business, see our filings with the SEC. This call will contain non-GAAP financial measures such as adjusted EBITDA. Reconciliations to these non-GAAP measures to the most comparable GAAP measures are included in the earnings release, furnished to the SEC, and available on our website. With that, I will turn the call over to Lisa.

Good afternoon, and thank you for joining us to discuss our fourth quarter results. Today, I will begin with a review of our fourth quarter performance, highlight our accomplishments during the year, and then discuss our strategies for 2024. Then I'll turn the call over to Mark Mazzico, who will review our merchandising strategies and marketing plans. Paula will then review the financials and provide our outlook for fiscal 2024. We are pleased to report that our fourth quarter sales in EBITDA came in ahead of our guidance. While we are not immune to the current macro environment, we are focused on the levers we can control. Our disciplined inventory management enabled us to reduce promotions and drive higher full price sales. For the quarter, we generated $294 million in net sales and $16 million in adjusted EBITDA. During the quarter, we observed strong customer engagement and a positive response to events like Black Friday and Torrid Cash, both of which exceeded our expectations. We saw positive regular price comp momentum and graphic tees, knit tops, and bottoms, categories that we will continue to build on in 2024. Looking back on fiscal 2023, we made significant changes to improve the fundamentals of our business. We've touched just about every aspect from merchandising to marketing to sourcing. We are pleased to see sequential improvement in our regular price business as customers responded favorably to our holiday and early spring merchandise collections. Key highlights from 2023 are improved assortment, and optimize channel investments to maximize regular price sell-through, resulting in margin expansion. Reducing our inventory levels, ending the year down 21% compared to a year ago. Consolidating our sourcing base, positioning us to meaningfully reduce product costs in 2024. Launching a new digital marketing platform, leading to an increase in reactivated customers compared to a year ago. We made a great deal of progress in 2023 and now have a strong foundation in place as we move into 2024. We will build on the work we have done by remaining focused on our strategic priorities, improving our merchandise assortment, strengthening our marketing messaging, and optimizing our working capital through cost and inventory management. In terms of our merchandising, we will continue to evolve and elevate our collections to give our customers a broad assortment of relevant styles and fits. Our collection will reflect a better balance of casual and dressy that appeal to a wider age demographic. We will build on the success we saw with trio denim launch, expanding offering of graphic tees, and our coordinate program. Additionally, we are thrilled to relaunch a popular casual fabrication, Shally, which is extremely versatile and supports an opening price point offering across our tops, bottoms, and dresses. We are pleased with the initial positive response we are seeing from our customers. In Curve, our intimate apparel brand, we will see the launch of new bras and innovation for the first time in many years. We will continue to invest in key items and programs. We know our price points skewed higher over the past few years as we moved away from a balance of casual and the assortment. Spring collections introduced a more casual assortment and broader pricing architecture across a good, better, and best cost engineered in a way that offer value to our customer while remaining margin accretive. Moving to marketing, we are focused on increasing customer engagement and acquisition by leveraging insights from our new digital marketing platform. We are delighted to announce our casting call model search to find the new face of Torrid for 2025. Mark will provide more details in a few minutes. Turning to working capital. We are driving profitability and strengthening our balance sheet by improving our working capital strategy through product cost efficiencies and inventory optimization. Central to our cost efficiency drive, we renegotiated our supply contracts and consolidated our supplier base, securing cost advantages that directly bolster our bottom line. This effort is complemented by our focus on design to value strategies and production efficiencies. where we scrutinize every aspect of design and manufacturing to pinpoint cost-saving opportunities without compromising our quality standards. Parallel to these cost efficiencies, our inventory management leverages data analytics to accurately forecast demand, allowing for more strategic inventory procurement and reducing the risk of overstocking. This is bolstered by our product rationalization process, where we continuously evaluate and trim underperforming products enhancing inventory turnover, and focusing on productive SKU offerings. Our mindset to chase inventory, supported by strengthening our supplier relationships, minimizes the necessity for large inventory holdings, increasing our market agility and reducing carrying costs. These measures are expected to drive sustainable growth and significantly improve our working capital efficiency, while creating significant value for our shareholders underscoring on our unwavering commitment to operational excellence and financial performance. In closing, I am confident that the strategic transformations we've put in place position us for a future marked by sustained growth and a strong foundation in 2024. Before I hand over the floor to Mark, it's essential to recognize the relentless dedication and commitment of our team. Your tireless efforts and unwavering dedication to our customers are truly what set TORED apart, creating an unparalleled and exceptional environment. Your contributions go beyond being recognized. They are profoundly valued. Thank you all for what you do. Now, turning it to Mark.