Greetings, welcome to the Torrid Holdings third quarter fiscal 2022 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, Vince Adams, SVP Finance. Thank you, Vince. You may begin. Good afternoon, everyone. Thank you for joining Torrid's call today to discuss third quarter financial results for 2022, 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, Chief Executive Officer of Torrid, and Tim Martin, Chief Operating Officer and 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 are based on expectations that involve risk and uncertainties that could cause actual results to differ materially. For a further discussion of risk related to our business, see our filings with the SEC. This call will contain non-GAAP financial measures such as adjusted EBITDA and adjusted EBITDA margin. 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. Thanks, Vince. Good afternoon, everyone, thanks for joining us for a discussion of our third quarter results. I'd like to start the call by recognizing the Torrid team for their continued dedication for the business as we face a choppy macroeconomic backdrop. Despite external pressures, we've remained steadfast in our goal to deliver exceptional product anchored on our world-class fit. I'd also like to officially introduce Tim Martin, who is joining today's call as our Chief Operating Officer and Chief Financial Officer. Tim brings a wealth of experience to Torrid, and he will be instrumental in helping us deliver on our strategic priorities. I look forward to you learning more about Tim and Torrid as we move forward. Moving into our third quarter results. Despite the challenging environment in late Q3, our net sales and adjusted EBITDA were within our expectations. During the quarter, we saw the customer respond favorably to new product introductions, including the launch of our Studio line of wear-to-work styles. However, similar to the trends experienced at other retailers, we saw a slowdown in consumer demand during the month of October that coincided with our Torrid Cash event, which typically makes up a large portion of quarterly sales. As a result of this softness, the comparable Torrid Cash event was down double digits versus last year and prior quarters, which negatively impacted performance. As we worked to right-size our inventory levels in the third quarter, we added incremental discounts and promotions which pressured margins. We were able to make headway clearing through inventory, ending the quarter with total inventory up 25% from last year. While this was a significant improvement relative to the second quarter, it is still somewhat higher than we would like, primarily due to the softer demand we experienced late in the quarter. We are focused on ending the year with clean inventory and expect to be promotional in the fourth quarter to end the year well positioned for 2023. We also continue to work on the priorities that I laid out previously. Key among these was enhancing our promotional and marketing strategies to better balance margin and sales growth. We are still in the test and learn stage of our promotional changes, and there continues to be significant opportunity for us to improve margins. Elevated inventory levels have limited our ability to pull back heavily on promotions this year. As we moved into 2023, we expect inventory levels to be much more balanced, which should enable us to further adjust our promotional strategy with the goal of expanding margin. We have had an opportunity to test different types of margin-enhancing promotions that we will be able to implement more fully next year. In terms of marketing, we are focused on driving customers to store and building the quality and quantity of our customer file. We know that stores are where the majority of new customers first discover and fall in love with our brand, and we view stores as a critical acquisition and engagement vehicle. For example, during the quarter, approximately 30% of the customers shopping in new stores were new to the Torrid brand. These customers typically spend 25% more in their first year compared to those acquired on the web. Stores and store acquisition is clearly an important strategy of growth for us. In order to build a healthy customer file, we are focused on re-engagement of lapsed customers and improving retention. Our marketing efforts to reengage lapsed customers continue to show promise. We generated another 500 basis point improvement in reactivated customers on top of the improvement seen last quarter. On social media, we're more focused than ever on product. We saw a 160% increase in product conversations versus the prior quarter, largely driven by the success of our Studio collection and the strong reception to the launch. We also executed an influencer campaign last quarter focused on jeans, which highlighted our world-class fit. Customers consistently note that our fit is what compels them to shop at Torrid, and we continue to see low return rates, which speak to the integrity of that fit. Turning to merchandising and product, we introduced new growth categories within the product assortment, starting with the launch of the Studio collection in September, which was executed with a full 360 degree integrated marketing campaign that spanned all channels. Given the shift in customer preference for work, wear to work styles, this was the ideal time for the launch. The collection was very strong and drove a 30 percentage point improvement in workwear sales growth versus the prior quarter. We also launched a new collection called Festi that was a nod to the iconic trends that defined the 2000s. This collection featured classic styles including baby tees and retro graphics, we saw our most loyal customers respond to the product with a VIP customer penetration that was more than double our typical VIP penetration across other categories. As we moved through the quarter, we offered new fashion and color, including cozy and cold weather product and novelty fabrics and prints. We are encouraged to see her response to new product, we have even more newness slated for the fourth quarter. Our holiday assortment features an expanded breadth of product, focusing on glitz, glam, and pretty for all of our holiday occasions. Our most loyal customers respond well to our special collections, we have many planned for this fourth quarter, including a retro chic collection, a new curve assortment with holiday colors, and we've added another drop of our Betsey Johnson collection. In closing, our team remains focused on making product and operational improvements that will position us to deliver sustainable long-term growth. We're seeing signs that strategy refinements are working, and we're excited about what our product is doing as we continue to capture her interest with relevant fashion and perfect fitting basics. The positive feedback and momentum that we received with our Studio launch is carrying forward into next year as we bring our customer compelling assortments anchored on an exceptional fit. Our new product launches and seamless customer experience build relevancy with our customer, which should lead to increased visit frequency and higher conversion rates. We are excited about our changes and how they build going into next year. With that, I'll turn the call over to Tim to provide more detailed financials on the quarter and our updated guidance. Thank you, Lisa. Good afternoon, everyone. I'm incredibly excited to be joining the company as Torrid's Chief Operating Officer and Chief Financial Officer. Torrid is an amazing brand with strong potential. I look forward to being part of its success. We have a significant opportunity for growth. I am happy to be working with Lisa and the Torrid team as we strive to consistently deliver on the company's potential. I will begin with a detailed discussion of our financial results, followed by an update on our outlook for the rest of the year. Starting with the third quarter results. Net sales came in at the low end of our guidance at $290 million, which was down 5% compared to $306 million last year. Comparable sales in the quarter declined 8% compared to a 14% increase in the third quarter of 2021. As a further comparable, we were up 9% to 2019. Similar to trends reported at other retailers, we experienced a slowdown during the month of October. This coincided with the timing of our quarterly Torrid Cash event, which negatively impacted our third quarter results. We were pleased to see our customer respond favorably to new product offerings during the quarter, including the Studio collection, and demand early in the quarter was more in line with our expectations. Gross profit for the third quarter was $92 million or 31.6% of net sales. This compares to $125 million, or 40.9% of net sales in the third quarter of last year. During the quarter, we continued to focus on right sizing our inventory levels, which resulted in an increase in discounts and promotions over the last year. Approximately 850 basis points of the decline was due to higher discounts and promotions to clear inventory. The remainder of the decline was inflationary and related to higher product and transportation costs, partially offset by price increases. Selling, general and administrative expenses in the quarter were $59 million, compared to $66 million for the third quarter in the prior year. As a percentage of sales, SG&A decreased to 20.4% from 21.7% compared to the third quarter of last year due to higher private label credit card income and lower performance bonus expense. As a reminder, the terms of our new private label credit card agreement provide a benefit to SG&A expense compared to a year ago. This benefit was partially offset by higher store and web payroll, primarily caused by inflationary pressures, including higher wages. Excluding the benefit from private label credit card income, SG&A as a percentage of sales increased 70 basis points, driven by the deleverage in sales. Marketing expenses in the quarter came in at $13 million compared to $15 million last year. As a percentage of sales, marketing expense was 4.4% and decreased approximately 50 basis points compared to 4.9% in the third quarter of last year. As we navigate a difficult macroeconomic backdrop, we've remained disciplined in our marketing investments and made the strategic decision to allocate expenses towards customer reactivation where we are seeing better returns. We've been able to drive improved spend efficiency versus the prior year. Turning to profitability. Net income for the quarter was $7 million or $0.07 per share, compared to a net loss of $59 million or a loss of $0.54 per share for the same period last year. We did not have any adjustments to net income in the third quarter of 2022. For comparison purposes, adjusted net income last year was $28 million or $0.25 per share. In addition to the GAAP measures, we believe that adjusted EBITDA is an important measure that we use to evaluate and manage our business. Adjusted EBITDA came in at the low end of our guidance range at $32 million or 11.1% of net sales. Turning to the balance sheet. Our cash and cash equivalents at the end of the quarter totaled $19 million. Total liquidity at the end of the third quarter, including available credit, was $159.4 million. Total debt at the end of the quarter was $327 million compared to $341 million in the third quarter of 2021. Our net debt to adjusted EBITDA was 1.9x at quarter end. Inventory at the end of the quarter was $200 million, an increase of 25% compared to $159 million in the prior year. This is a significant improvement compared to the 64% growth at the end of the second quarter. We continue to focus on reducing our inventory levels and expect to clear through any remaining seasonal inventory by the end of the year. While we plan to end the year with inventory up to last year, it will be clean and comprise mostly of basics and early spring receipts. We opened five stores in the third quarter, including two Curve stores, and we closed three stores. We have opened 14 stores year- to- date. We now plan to open approximately 27 total stores for the year, including eight Curve stores. Turning to the outlook. Given the challenging macroeconomic environment and the volatility in our demand trend, we are updating our outlook for the remainder of the year. For the fourth quarter, we project net sales to be between $285 million and $300 million, and adjusted EBITDA to be between $9 million and $14 million. The outlook for our gross margin rate will remain pressured as we continue to reduce inventory to bring levels in line with demand. For the full year, we are forecasting sales to be between $1.244 billion and $1.259 billion. For the adjusted EBITDA, we are now projecting it to be between $145 million and $150 million. Capital expenditures are projected to be between $27 million and $30 million for fiscal 2022, reflecting infrastructure investments and approximately 27 new store openings. We are also planning to close 13 stores this year. In closing, we are facing an uncertain and dynamic environment. Torrid is certainly not immune to these challenges. While I've only been at the company a short time, I have been impressed with the strength of the Torrid brand, its relationship with the customer, and the Torrid team. I believe we are putting the right strategies and priorities in place to deliver consistent long-term growth. In the near term, we are gonna focus on controlling the controllables and setting the company up for success going forward. With that, I will now turn it over to the operator for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions. Thank you. Our first question is from Oliver Chen with Cowen. Please proceed with your question. Hi. Thanks very much, Lisa and Tim. On the inventory situation now, what are the main strategies to clear through it? Also, is there a risk in terms of the depth of promotions you may need to take? What are you seeing in the consumer environment that gives you, conviction you can get through it? As we look ahead to modeling inventory in the new year, would love your take on how you see that in terms of the growth rate relative to sales. A second question, Lisa, zooming out, what's your hypothesis for driving greater consistency in terms of what, the brand and indoor strategies, may need to take place for that to happen? Tim, lastly on the debt, what's your target ratio? Would love your refreshment on your priorities in terms of the debt level and the debt-to-EBITDA ratio you seek to maintain. Thank you very much. Okay. Thanks, Oliver. I'll start with the inventory question. Our aging on our inventory is actually very, very positive, meaning our... We have very current inventory. There's a lot of moving pieces with inventory. Particularly the only bulk of inventory that has a long trajectory in terms of clearing is basics, and that's primarily basics in bras and denim and other bottoms. We are of course not promoting that heavily and not burning down that inventory, but we'll land the plane on that and feel comfortable that we can manage that appropriately. The other increase in inventory is actually r eceiving our spring product in the correct time table because last year we considered resort, which just set in the stores to be a spring line and so we count that in our spring inventory. We received that on time, and we're receiving spring one, which will set the end of December on time as well. Last year those lines were late. I'm not worried about the timeliness of managing the inventory. We are just very committed to making sure that we stay on top of it and that we turn it quickly. I think actually the opportunity for us is we are much cleaner than we've been all year, and the inventory is very current and that we and moderate promotions as we move forward. I don't actually expect in the first quarter to have to accelerate any more than we have. I think that we have some possibility of being able to moderate that as we deliver new product and have the customer respond to that. Overall with inventory, I'm comfortable with the aging. It's actually quite clean. There's moving pieces associated with it. We're just committed to making sure that we stay on top of it and keep it as current as possible so that we are not kicking a problem down the road. On my hypothesis for consistency, if I understand what that means. I've been here a few months, one of the things that we've really focused on aside from building the right team and building the right operational foundation for the business, is the process for developing our product assortment flow and those assortments by channel. Some of that discipline had been lost over the pandemic time period. We've reinstated processes that are very straightforward, that are very typical and well known in kind of this environment and moving more of our analysis and development earlier in the process, meaning a template for development and then being able to really test and react more appropriately as we move down the path. We've changed the process for development. We're, and we're also have reinstated our chase mode, our chase capabilities in the business, so we're being able to chase as we go into first quarter. Just basically put some core disciplines into place, particularly in assortments by category and by channel, meaning stores versus online assortments. I feel very comfortable with the disciplines that we've put in place that will help deliver some consistency as we move into spring and throughout the balance of next year. Putting chase back in place, leaving liquidity in our inventory, will allow us to react to the customer more appropriately and help build some of that consistency. I'm turning the last one over to Tim. It's the last one. Oliver, to also answer a little bit of a question you had on inventory. We believe our guidance appropriately reflects any of the promotional activity we'll need to do in the fourth quarter to keep that inventory as clean as Lisa mentioned and position us for success going into the first quarter of 2023. Which kind of dovetails into the conversation around debt levels. We can generate as a business pretty healthy returns on operating cash flows when our working capital and inventory are aligned with sales and demand. As such, we're gonna generate a lot of free cash flow in the future of this business. We'll look to invest that in the growth opportunities that we see. We have a significant amount of incremental store opportunities both in Canada and the U.S. that we'll wanna invest in and continue to grow this business at the appropriate times. We also will look at investing in technology where necessary or other things to bring the customer experience to a higher level. As such though, we're comfortable with our overall debt level at this point in time, and I don't see any need to do anything in the short term to do that. If we have extra cash flow beyond our investment capability to grow the business, we'll look at doing something at that time. Thank you. Happy holidays. Best regards. Thank you as well. Thank you. Thank you. Our next question is from Dana Telsey with Telsey Advisory Group. Please proceed with your question. Hi, everyone. Can you expand upon the customer base and the improving retention? Where are you now in terms of retention? How did it look? Does it look different online versus in store? Can you expand on the product conversion into different categories? Sounds like the Studio collection you got a strong response to. What are you seeing in the other categories? Lastly, with the impact of inflation, what are you seeing both on a channel basis and regionally with your core customers? How does it differ? Thank you. Thanks, Dana. I'll just talk generally as we have an approach to our customer, spoke about it before and, we're maintaining a consistent approach here, is we have new customer acquisition that we pay attention to, retention and frequency and reactivation. We talked on the prepared remarks that our reactivation campaigns continue to yield very positive results. Our retention numbers are actually quite strong, as we do think we can improve that a couple hundred basis points as we move into next year. What we're trying to do, in addition to retention, is to build frequency. What we've found and what we know is that every time we have a launch like Studio, like Festi, like a new bra frame, that that engages our core customer, at the highest levels and drives them to build frequency. Next year we have a multiple launch plan that will have launches 4-5 major launches throughout the year of new product categories that really do drive frequency with that core customer. On the new customer piece, it's as we mentioned in the remarks, it's primarily driven through store acquisition as the healthiest piece of that. We are also, we also have new customer acquisitions that will be driven through digital campaigns next year as well. Happy with the retention of all building frequency among those customers and the focus on reactivation in short term. Next year, we'll continue with a full 360-degree approach to building that customer file and maintaining the quality of that customer. On the product conversion, I think I spoke a little bit to that in terms of new product. Yes, Studio works very well for us and continues to work well. I'm very happy with the product that the teams delivered for holiday in terms of a balance between cozy and then glitz and glam and feminine that really responded to the correct timing. I think our stores look, I think they look very, very good and our customers actually have been asking us if we remodeled. I think that is a great, a great comment on the quality of the merchandising assortment and how that was presented to the customer. We are seeing, as we are bringing in relevant fashion products for the season at the right level and presenting it appropriately, that the customer response among not just our existing customers, but among new customers is positive. We're excited and think that that's a great indicator of some of the things that could be in store for us next year from a product perspective. The inflation channel question is. One of the things that we've been talking about is that in the first several quarters of this year, that the inflationary impact really was most prominent in our lower household income customers. For the first time in the third quarter, it impacted all categories of the customer. They had been immune. The upper income levels had been immune up until the end of third quarter. We did see that for the first time impacting that level. Thank you. Thanks, Dana. Thank you. Our next question is from Lorraine Hutchinson with Bank of America. Please proceed with your question. Hi, this is Alice Xiao on for Lorraine Hutchinson. Thanks for taking our question. Had a quick follow-up on Oliver's question. Can you give us a more detailed breakdown of your inventory composition and just percentage of inventory in each category, whether it's, you know, basics, evergreens versus fashion versus things you need to clear? Secondly, on the updated development process you mentioned just now, how much are you leaving open to chase in 1Q versus what you normally would leave open to chase? Thank you. Yeah. I'll take the first portion. We don't break out the total detail level of inventory. As Lisa mentioned, what we've seen where we're the deepest in right now are things that are mostly basics and evergreen categories that we have the time to work through. We are very clean on seasonal and liability product. We're confident that we're gonna continue to maintain that, and that's what we're very much focused on. I'll turn to you. Do you want me to answer the other question? On the development process, we are leaving. I'm not gonna go into percentages, we're leaving more open on a liquid basis in order to test and react. We also are testing product in the first quarter with the idea of reordering that product into subsequent quarters. It's, there's a quick turn aspect of the liquidity, and then there's also a test and then holding liquidity later as we get the results of those tests to buy into those specific categories. It's a multi-pronged approach. I'm comfortable with the amount that we have open at this point, and our sourcing team is working diligently in finding opportunities for us to be more efficient and react more quickly to some of these wins. Thank you. Lastly, does the updated guidance for sales really assume performance kind of in line with the exit rate, or are you contemplating any more sort of incremental macroeconomic pressure? I would say that our guidance contemplates a couple different things. One is the trend that we've seen going through the third quarter, the uncertainty of the overall macroeconomic environment, and our desire to maintain a cleanliness in our inventory position and set us up for a 2023 that we're pretty optimistic about where our product development as we roll into spring will position us for. Thank you. Thank you. Our next question is from Mark Altschwager with Baird. Please proceed with your question. Hi, this is Amy Teske on for Mark Altschwager. Thank you for taking our question. Can you give us any commentary on your Black Friday performance and how that informs your view on the holiday season? With respect to the updated guidance, what are the underlying assumptions that you've baked in for January as you cycle last year's supply chain disruptions? I'll take the first part of the question related to Black Friday. What we did see is, as Lisa mentioned, we are seeing the customer respond to some of the newness. Unfortunately, you know, given our inventory position, we were still very promotional throughout the holiday. We did see actually a pretty s urprising and slightly better than we expected response in store. I think, as Lisa mentioned, the way the new product is resonating in stores has been well-received by the customer. Again, we had to be highly promotional to continue to clear through product. Our January expectations are that the trends that we've been dealing with over the last quarter would retain itself through the holiday. Less around the supply chain disruption. That really didn't impact us all that much, as a comparable benefit, we've kind of just assumed basically the current trend of the business will carry forward in our guidance. Okay, thank you. If I could ask one more. When you're approaching 2023 internally, what scenarios are you baking into your operational planning? Sorry, can you repeat that question? I just wanna make sure I followed you. Yeah. Not asking about 2023 guidance, but when you're approaching the year internally, what macro scenarios are you baking into your operational planning? We maintain as much flexibility as we can right now given the uncertainties in the overall macroeconomic environment. We're gonna continue to focus on maintaining our inventory investments in line with the demand trends. As Lisa mentioned, by keeping a little bit more open in our open-to-buy process, it allows us flexibility to throttle up or throttle back as needed as to react to the demand. Okay, thank you. Sure. Thank you. Our next question is from Alexandra Straton with Morgan Stanley. Please proceed with your question. Hi, this is Katy Delahunt on for Alex Straton. Thank you for taking my question. I was wondering how you view the health of the consumer. Are you seeing maybe any different impacts in terms of income level, are you seeing any signs of trade down? Thank you. For the first two quarters of 2022, we only saw an impact to our lower income customer, and that was pretty consistent. For the first time in third quarter, we saw an impact throughout all income levels. I don't have the data for fourth quarter, but we'll talk about that as we move at our next call. For the first time, as I mentioned, in third quarter, we did see it impact all income levels. To answer your question about if the customer is trading down, we have not seen them actively trading down when the product is right and they're responding to the newness. We've seen some strong response there regardless of price. However, we have been so highly promotional that our, you know, average unit retail is lower than it has been historically, so she hasn't actually had to trade down. Great. Thank you. Thank you. There are no further questions at this time. I'd like to turn the floor back over to management for any closing comments. Thanks everyone for joining us for this call. We look forward to returning on the fourth quarter and full year call. I wanna wish everyone a happy holiday season. Thanks so much. All the best to you and yours. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.