Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Torrid Holdings Inc. (“Torrid” or the “Company”) (NYSE: CURV) common stock traceable to the Company’s July 2021 initial public offering (the “IPO”). Torrid investors have until January 17, 2023 to file a lead plaintiff motion.
Investors suffering losses on their Torrid investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
Torrid conducted its IPO in July 2021, selling 12.65 million shares at $21 per share.
On December 8, 2021, Torrid announced its third quarter 2021 financial results, and disclosed that sales had increased only 14% year-over-year, compared to a reported 108% increase for the first quarter of 2021. The Company also lowered its annual guidance. On this news, Torrid’s stock price fell $4.37, or 27.9%, to close at $11.28 per share on December 9, 2021.
On January 10, 2022, Torrid issued a press release further lowering the Company’s sales and earning guidance. On this news, Torrid’s stock price fell $2.50, or 23.4%, to close at $8.20 per share on January 10, 2022, there injuring investors further.
Then, on March 17, 2022, Torrid released its fourth quarter 2021 financial results, revealing that sales growth had continued to decelerate to just 4.5% growth during the quarter, with the Company’s adjusted EBITDA margin falling to only 9% of net sales due to supply chain disruptions and increased transportation and product costs.
On September 7, 2022, Torrid released its second quarter 2022 financial results, revising the Company’s annual 2022 net sales guidance from a range of $1.3 billion to $1.365 billion to a range of $1.26 billion to $1.3 billion, as well as revising its annual 2022 adjusted EBITDA guidance from a range of $195 million to $220 million to a range of $160 million to $175 million.
By the end of September 2022, Torrid’s stock price fell to a low of $4.06 per share, more than 80% below the IPO price.
The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that in the first half of 2021 Torrid had experienced a temporary surge in demand as a result of changed consumer behaviors in response to the COVID-19 pandemic and government stimulus and that such ephemeral demand trends had dissipated and were not internally projected to continue following the IPO; (2) that Torrid was suffering from severe supply chain disruptions caused by the emergence of the Delta variant of COVID-19, which had first emerged in May 2021; (3) that Torrid was running materially below historical inventory levels as a result of supply chain disruptions; (4) that, as a result of the foregoing, Torrid did not have sufficient inventory to meet expected consumer demand for its fiscal third quarter of 2021; (5) that, as a result of the foregoing, late inventory arrival had materially impaired the Company from effectively matching consumer buying trends, creating an undisclosed risk of increased markdowns and promotional activities necessary to sell undesirable inventory; (6) that Torrid’s CFO planned to retire shortly after the IPO; and (7) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
If you purchased Torrid common stock, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
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