On Friday, Jefferies updated its stance on Torrid Holdings Inc (NYSE:CURV), increasing the price target to $4.80 from $4.00, while maintaining a Hold rating on the stock. The adjustment follows Torrid's fourth-quarter earnings, which surpassed both consensus estimates and the company's own prior guidance.
The company's revenue and adjusted EBITDA for the quarter were highlights, exceeding expectations. A notable improvement in Torrid's gross margins, which expanded by 250 basis points year-over-year, was attributed to reduced product costs and a more disciplined approach to markdowns, enhancing product margins.
Despite the positive performance in the fourth quarter, Torrid's outlook for the first quarter and the full fiscal year was slightly below market expectations. Nevertheless, the results of the fourth quarter were seen as a positive development for the company.
The analyst from Jefferies underscored the significance of the fourth-quarter performance, stating that it represented a step in the right direction for Torrid. The raised price target to $4.80 reflects this sentiment while the Hold rating remains unchanged.
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