Greetings and welcome to the Torrid Holdings First Quarter Fiscal 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your hosts, Chinwe Abaelu, Chief Accounting Officer and Senior Vice President. Thank you, and you may begin. Good afternoon, everyone, and thank you for joining Torrid's call today to discuss our financial results for the first quarter of fiscal 2025, which we released this afternoon and can be found on our website at investors.torrid.com. With me on the call today are Lisa Harper, Chief Executive Officer of Torrid; Paula Dempsey, Chief Financial Officer; Ashlee Wheeler, our Chief Strategy and Planning Officer, is also present and will be participating in the Q&A session. 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 and terms of similar meaning. All forward-looking statements are based on current expectations and assumptions as of today, June 5th, 2025. 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. Thank you, Chinwe. Hello, everyone, and thanks for joining us today. I'm excited to update you on the progress we are making across our strategic business initiatives, namely enhancing our product assortment, driving customer growth, and executing our store optimization plan. I'm also pleased to report that we delivered on our first quarter sales and EBITDA guidance. Now, an update on our strategic business initiatives. The performance of our sub-brands continues to reinforce our belief that the strategy is working. Festy, Belle Isle, Nightfall, and Retro Chic have all had multiple deliveries at this point, and they are overachieving our expectations from two to six times what we had originally planned. These sub-brands are designed and marketed for distinctive lifestyles, targeting a broader range of plus-size consumers, and they are revolutionizing our collections to embrace diverse fashion sensibilities and deliver truly differentiated options. This calculated expansion has attracted new clientele and has deepened relationships with our current customers, driving increased spending across our portfolio. Importantly, our sub-brands are attracting new and younger customers, reactivating lapsed customers while also creating a halo effect for our mainline Torrid offerings. With a margin structure higher than our core Torrid product, we are doubling down on our efforts to further expand our strategy with planned launches of new sub-brands throughout the year, while also increasing the delivery frequency on existing sub-brands from the current six to eight times a year to twelve times annually, growing their penetration from approximately 10% this year to up to 30% of our portfolio in 2026. We will continue to fund the growth of our sub-brands through reductions in less productive Torrid SKUs, enabling us to deliver compelling, high-margin products. Now, shifting to our channel optimization initiative, our customers continue to send a strong message that they prefer an online experience which better supports our internal marketplace strategy that showcases the entire breadth of our assortment. Our website experience is powerful, and the perceived value to the customer is high across this channel. She loves that she can see and explore everything we offer, view outfitting options, and see herself. This is supported by our consistent sizing expertise and overall customer satisfaction, which continues to drive our industry-leading low return rates. Our online sales demand continues to grow and is approaching 70% of total sales. We expect web demand to reach a low to mid 70% penetration in 2026. As part of our digital transformation long term, we see the business model evolving to an approximate demand mix of 75% online and 25% in- store. This brings me to an update on the optimization of our retail footprint. As we mentioned on our Q4 call, we closed 35 stores in 2024, and we were targeting 40-50 closures in 2025, with the potential for additional closures, as approximately 60% of our store fleet is up for lease renewals this year. With our customers increasingly preferring to shop our online experience, we are accelerating our fleet optimization efforts with a plan to now close approximately 60 stores in the first half of this year. We believe we have an opportunity to close up to an additional 120 stores in the back half of this year, bringing the total number of targeted closures for the year to approximately 180. Paula will provide more detail on the net impact of these closures, but importantly, given many of these stores have lower productivity and we continue to experience sales and customer retention rates from closed stores of approximately 60%, the projected impact to net sales is expected to be negligible. With the annualization of these closures, we would expect to see from 150 to 250 basis points of EBITDA margin benefit net of increased marketing investment. We are planning to allocate a portion of the cost savings from the store closures to customer acquisition marketing, as well as a more expansive effort to retain and transfer existing customers to the web or neighboring stores. As a reminder, 95% of our customers are in our loyalty program, so we have a large amount of data on their shopping patterns. Our physical stores will continue to represent an important touchpoint to complement our omnichannel go-to-market strategy. They serve as community hubs and immersive brand-building experiences, introducing customers to our brand and sub-brands, offering the dressing room experience, and acting as service centers for purchases made online or in stores. Most importantly, our passionate sales associates bring the brand to life, delivering personalized service that deepens customer connection and drives long-term loyalty. As we mentioned on the Q4 call, we see opportunities to enhance the expression of our brand in stores to better align with the online experience, and we remain committed to refreshing 135 stores in the third quarter. These are low capital investments with an expected fast return. In summary, the optimization of our retail store fleet represents a strategic shift to better align our distribution with customer demand, which is expected to dramatically enhance our customer experience and deliver healthier sales growth while improving our overall profitability and cash flow. Now to tariffs. Let me start with the punchline. Our current exposure to China-sourced goods will be in the low single digits for the balance of the year, down from the mid-teens. Improving our sourcing has been a key area of focus for several years, and I'm proud of the robust sourcing infrastructure we have in place today. Our team has worked to reduce our exposure to China by diversifying into other countries and cultivating strong relationships with a broad range of vendor partners who, in many cases, have developed manufacturing capabilities in multiple countries. In addition to shifting production out of China, our tariff mitigation playbook also includes sharing the increased costs with our vendor partners, exploring cost-saving fabric opportunities such as using Egyptian denim instead of Turkish denim, and strategically and selectively making low single-digit price adjustments where we see a value proposition opportunity. As it stands today, after these actions, we expect the net impact of tariffs to be approximately $20 million for the remainder of the year, calculated based on current tariff rates, which we will offset primarily through discretionary expense reductions, store optimization, and prioritization of projects across the business. We have also made the strategic decision to temporarily pause and reevaluate shoe offerings, which are 100% sourced out of China. This strategy shift will result in a neutral EBITDA impact in 2025 and an expected revenue loss of approximately $40-$45 million. On a go-forward basis, we are actively exploring opportunities to re-enter the shoe category in a way that adds profitability and aligns with our broader sourcing strategy. Looking ahead, our goal is to keep any individual country, Vietnam included, to under 20% of apparel sourcing penetration. Turning to marketing, our strategy this quarter focused on creating momentum through bold storytelling, elevated community engagement, and agile execution. We leaned heavily into messaging around newness, supported by more frequent site refreshes. This not only resonated with customers but helped set the stage for strong performance during our Torrid Cash and after-party events. While consumer sensitivity to promotions remained elevated in the current macro environment, our strategic messaging helped capture demand and drove conversion during key moments. One of the most exciting highlights of the quarter was our Coachella activation under the Festy by Torrid sub-brand. The campaign sparked remarkable engagement, generating millions of impressions and expanding our social following significantly in just one week. Beyond the numbers, it demonstrated the power of showing up in cultural moments where plus-size women are often underrepresented. The response from our community was overwhelmingly positive, reaffirming our strategy to lead with authenticity. We saw meaningful success in evolving our approach across channels. In digital, we prioritized spend toward customer acquisition, which contributed to solid performance in both new and reactivated customer segments. SMS and push campaigns benefited from thoughtful timing and dynamic content, leading to successful push revenue during the quarter. In email, we tested new creative formats and editorial storytelling, such as day-to-night looks and curated collections, which performed well and confirmed the value of continually refreshing our content pipeline. Across paid and owned channels, we continued balancing performance with brand building, testing new creative formats and placements to drive long-term value while maintaining short-term efficiency. Our loyalty program played a critical role, with strategic bonus points events and targeted rewards helping drive frequency, retention, and cross-category migration. Torrid Cash, in particular, was a strong traffic and revenue driver during the quarter, and our after-party events sustained momentum with additional customer engagement. Lastly, our mobile app reached a new revenue high, supported by timely push notifications, exclusive offers, and seamless loyalty integration. The app continues to grow as a key touchpoint for high-value customers and plays an important role in omnichannel retention. Our marketing performance this quarter reflected a disciplined, creative, and community-first approach. We remain focused on amplifying what works while continuing to evolve with our customers, stay culturally relevant, and drive sustainable growth ahead. Let me wrap up with a brief review of our first- quarter results. As I mentioned, our performance for the quarter was in line with expectations for both net sales and EBITDA. We registered net sales of $266 million and EBITDA of $27.1 million at the high end of our guidance. Our comparable sales were down 3.5%. Although consumers remain price and value conscious, our customers are responding well to newness highlighted by the sub-brand. As I noted earlier, our online demand once again outpaced stores, and we are encouraged to see a high percentage of customers who made a sub-brand product purchase are also picking up items from our core line. Overall, apparel performance in Q1 showed encouraging signs of momentum as the quarter progressed. While February proved to be the most challenging month, we meaningfully improved in March with further stabilization in April. We saw strength in key categories, including dresses, denim, and non-denim bottoms, each of which delivered positive comps for the quarter, reflecting strong consumer response to refreshed assortments and trend-right product. We remain in a strong financial position, ending the quarter with $23.7 million in cash, and we have access to $117.3 million of additional liquidity from our revolving credit facility. Our inventory position and composition are in excellent shape, and we are managing all aspects of the business with a prudent approach to the controllables, while playing offense focused on profitable growth. In closing, I'd like to recognize our exceptional Torrid team. Their relentless commitment to elevating our merchandise, driving innovation, and streamlining operations has been transformative. We've made remarkable strides in our strategic initiatives, establishing the foundation for sustainable, profitable growth with an eye towards creating value for all of our stakeholders. With that, I'll turn it over to Paula. Thank you, Lisa. Good afternoon, everyone, and thank you for joining us today. I will walk through our first- quarter financial performance, discuss progress against our strategic priorities, and share our outlook and guidance for fiscal 2025, along with how we're positioning the business for long-term value creation. We delivered results in line with expectations for both net sales and adjusted EBITDA in Q1. After a slow start to the quarter in February, we saw improving sales momentum as the quarter progressed. Importantly, we began to realize tangible benefits from our store optimization initiative launched last year, which supported a reduction in SG&A and reinforced our focus on profitability and disciplined cost control. Net sales for the first quarter were $266 million compared to $279.8 million in the prior year. Comparable store sales declined 3.5%, reflecting continued pressure in our physical retail locations, partially offset by strength in our digital channel. Our performance reflects the continued evolution of our consumer shopping behavior, and we remain focused on adapting accordingly. Gross profit was $101.4 million, down from $115.4 million last year, with gross margin declining 320 basis points to 38.1%. The decline in margin rate was driven by planned promotional initiatives to improve conversion rates. We maintained an effective approach to expense management. SG&A was favorable by $6.5 million, resulting in $70 million in Q1 compared to $76.5 million in the prior year. As a percentage of sales, SG&A leveraged 100 basis points to 26.3% versus last year. This expense discipline remains a critical lever as we navigate the current environment. The year-over-year favorability in SG&A was driven by our store optimization efforts, as well as prioritization of company-wide projects and contract renegotiations. We strategically increased marketing investments to $15.4 million from $12.8 million a year ago, deploying funds to support the launch and awareness of our new sub-brands. This reflects a strategic shift toward customer acquisition and brand building designed to drive long-term customer file growth. In the first quarter, we saw a steady customer acquisition and reactivation momentum on the web, achieving positive results, which we believe are due to our marketing strategy shift. We delivered net income of $5.9 million, or $0.06 per share, compared to a net income of $12.2 million, or $0.12 per share, in the prior year. Adjusted EBITDA was $27.1 million, representing a 10.2% margin versus $38.2 million and 13.7% last year. The year-over-year EBITDA cadence was anticipated, reflecting our decision to increase the allocation of marketing investments to earlier in the year to support our sub-brand momentum. We ended the quarter with a healthy liquidity position. Cash and cash equivalents stood at $23.7 million, up from $20.5 million in the prior year, and we had no borrowings outstanding under our revolving credit facility. Total liquidity, including available borrowing capacity, remained strong at $141 million. Additionally, we continued to strengthen our balance sheet by reducing total debt from the prior year by $16.2 million to $284.5 million. Inventory totaled $149.6 million, a 3.3% increase versus last year, primarily due to in-transit timing. We're managing inventory with precision and expect to see temporary fluctuations throughout the year. However, we expect year-end comparable store inventory to be lower by mid- to high single-digit percentages, and with store closures, expect our total inventory to be down meaningfully more. As Lisa discussed earlier, as part of our continued strategy to align our demand channels, we're making decisive progress on our store fleet optimization. With over 60% of our store leases up for renewal in 2025, we're accelerating our store closure efforts, and we'll have approximately 60 stores closed by the end of Q2 and as many as 180 stores over the full year. Most of these additional 120 closures are anticipated towards the end of fiscal year, taking advantage of lease expiration dates, and therefore will require little, if any, incremental costs to exit. The stores we have identified for closure are underperforming relative to our fleet, with an average of approximately $350,000 in annual sales. They're primarily situated in less attractive or lower-performing areas. We expect the net sales impact from these store closures to be minimal, and we plan to offset it through more targeted marketing investments and enhancements to our customer retention strategy. Historically, we have retained approximately 60% of our customers post-closure, a trend that has held true with our most recent closures. Going forward, our enhanced approach includes a multi-touch communication plan with both email and SMS outreach before and after closure, along with incentives to transition customers to a nearby store or to our digital platform. Additionally, our store optimization strategy will significantly reduce our cost structure and improve working capital, allowing us to reinvest more aggressively in customer reactivation and acquisition initiatives to support long-term revenue growth. Turning to our updated guidance for fiscal 2025, we're revising our revenue outlook to reflect a strategic decision to pause our footwear business. This will result in a revenue impact of approximately $40 million to $45 million this year. We now expect full-year net sales in the range of $1.030 billion-$1.055 billion. We remain committed to delivering healthy profitability and expect our adjusted EBITDA to range from $95 million to a $105 million for the full year, which includes the net impact of tariff headwinds and our mitigation efforts. We expect to mitigate approximately $20 million of tariff impact through $20 million in expense reductions for the year. Half of these reductions will come from our store optimization project, while the remainder will come from discretionary spending and reprioritization of internal projects. Our quarterly sequence will be slightly different from the past years. Over the years, we realized 60%-65% of our full-year adjusted EBITDA in the first half of the year. In fiscal 2025, we expect our quarterly adjusted EBITDA to be more evenly spread due to a shift in marketing spend from the second half into the first half of the year to support the launch of the sub-brands, while cost reductions are expected to have a more significant impact in the second half of the year, leading to a more balanced strategy for profitability across the quarters. Capital expenditures are expected to be in the range of $10 million to $15 million, focused on technology, digital experience, store refreshes, and fulfillment capabilities to support our omnichannel growth strategy. For the second quarter, we expect net sales of $250 million to $265 million and adjusted EBITDA between $18 million and $24 million. This includes the projected tariff impact of approximately $5 million. Looking ahead to fiscal 2026, while we're not issuing formal guidance at this time, we believe it is important to share early visibility into the expected benefits of our 2025 sales channel realignment actions. As I mentioned earlier, the stores identified for closure generate an average annual sales of approximately $350,000, significantly below our fleet average. As a result, we expect minimal impact to the top line both during the closure process and in future years. Historically, we retained roughly 60% of sales and customers following a store closure, driven by the strength of our loyalty program, which includes 95% of our customer base. This high enrollment rate enables us to effectively redirect sales to nearby locations or our digital platform. Taking into account the net financial impact of these closures, together with incremental reinvestments into marketing and store experience, we expect a benefit of 150-250 basis points of EBITDA margin expansion in fiscal 2026 and beyond, supporting enhanced profitability and sustainable top-line growth. This initiative also advances our fleet rebalancing strategy, shifting the mix from 65% enclosed malls and 35% outdoor centers to approximately 55% and 45%, respectively. As we have shared in previous calls, outdoor centers typically deliver stronger productivity for our brand. In closing, we're operating with a discipline and a clear strategic framework, tightly controlling what we can while positioning the business to win in a fast-evolving retail environment. Our priorities remain optimizing our footprint, investing in high ROI growth levers, and strengthening our financial foundation. We are confident that our focused execution and strategic decisions today will support sustained, profitable growth over the long term. With that, I'll turn the call back to the operator for Q&A. 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 a line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Lorraine Hutchinson with Bank of America. Please proceed with your question. Hi, this is Marion for Lorraine. Could you talk a little bit about how we should think about the cadence of newness for the second half? Hi. The cadence of newness for product? Yeah, just in terms of your sub-brand launches, just how we should think about that for the remainder of the year. Right. We have another new sub-brand launching in August, which is Lovesick, which is geared toward a younger customer at a slightly lower price point. And then we have Studio Luxe that will launch in September, which is a higher-end kind of desk-to-drinks concept. We then, in the back half of the year, accelerate the timing of our launches for the existing brands: Belle Isle, Festy, Nightfall, and Retro Chic. By the end of the year, I would say into fourth quarter, we will be delivering all of those brands on a monthly basis. Thank you. Thank you. Our next question comes from the line of Brooke Roach with Goldman Sachs. Please proceed with your question. Hi, this is Savannah Summer. I'm from Brooke Roach. Thank you so much for taking our question. It's great to see the momentum with the sub-brands. You've discussed them as being an avenue for new customer acquisition, and I'm curious if you could discuss what trends you've been seeing with these new customers following their initial sub-brand purchase. Are you seeing them shop across the broader assortment and other sub-brands? Is there any unique differences in shopping behavior by channel or category to call out versus your legacy customer? Thank you. Hi, this is Ashlee. We are seeing really positive movement in the customer file related to these sub-brands, acquiring and reactivating new and younger customers than our average age in our existing file. Additionally, we're seeing really positive movement among existing customers with an increased lifetime value attached to them. Really seeing incremental purchase behavior from that group, as well as really high transaction size. We're seeing a very high attachment rate as well. About 90% of the time, those that are participating in the sub-brands are adding other core-to-order products to their basket. I would add that it is performing substantially higher online than in stores. Although we've distributed Belle Isle, particularly to 350 stores, and Festy to an average of about 200-250 stores, we continue to see a predominance of demand coming from the digital channel. We think it's important to continue to bring newness to the store environment, but we're certainly, I think, by reaching a broader audience, reactivating a broader audience, and bringing younger customers into the brand, seeing a predominance even more than our average breakout toward the digital channel. Great. Thanks so much for the color. I'll pass it on. Thank you. Our next question comes from the line of Alex Stratton with Morgan Stanley. Please proceed with your question. Hi, this is Kadion for Alex. Thank you for taking our question. I just wanted to look at Q2 specifically. I think at the midpoint of your guidance, it implies a sizable sales growth deceleration. Is there anything going on there, and does that reflect quarterly trends, or what should we know there? Hi, this is Paula. How are you? Yeah. As we had discussed earlier on our call, we are pausing right now our shoe business until further notice. The majority of that business is currently sourced from China, and that business tends to be lower margin. At this point, we're pausing it and just essentially reevaluating other partners to support the re-entry into that business at a higher, more profitable margin. That impacts about $45 million in sales for the year, kind of spread evenly through the balance of the year. That is correct. Got it. Thank you. I do not know if you're giving any color on quarter-to-date trends or if that's in line with your guidance there. Just think through the guidance. We're continuing to see overall choppy customer behavior, but it's going in both directions. We have some softer times and some stronger times. We feel and are observing that she's buying slightly closer to need. Seasonal categories are coming—their demand is coming in a little bit later. We continue to see strength in our digital channel and look forward to really strong performance as we go through the back of the year with their semi-annual sale, our Torrid cash event, as well as their afterparty. Great. Thank you so much. Thanks. Thank you. As a reminder, if anyone has any questions, you may press Star 1 on your telephone keypad to join the queue. Our next question comes from the line of Dylan Carden with William Blair. Please proceed with your question. Appreciate it. I'm sure you covered this. Apologies. There's a lot going on tonight. The planned promotional or the use of promotion strategically through the quarter kind of mixed in with this flow of newness that you're seeing. Can you just remind us what are the promotional strategy from here? Should those things exist or coexist? Is that more a reflection of the current market? As far as the online versus retail channels, is online more promotional and more promotional channel? Thanks. Hi, this is Ashlee. We are continuing to be, I would say, as promotional as we typically are. Our cadence of major events like Torrid cash, as you mentioned, will be four times a year as historically have been and as planned, two semi-annual sale events. We are responding to general consumer, I would say, price consciousness or value orientation with promotional events, which she has been very, very responsive to. That will continue. That's implied in our guidance. Okay. I am just kind of curious, the acceleration in closures, what's behind that? How are you arriving at the 75/25 split as the right level? Yeah. Can we sort of start there? Sure. I think that, Dylan, the customer continues to tell us that she prefers to shop online. We have talked previously. We are in the mid-60s in terms of penetration. That penetration keeps growing. That business keeps comping online. We are now acquiring more customers online than we are in the store channel. All of the trends—and I think we have supported this with marketing strategies, with investment in digital marketing, with the sub-brand strategy and the expansion of product categories. I think the web experience for us is a dramatically powerful channel for storytelling for our customer. As we do that, she continues to migrate online. We still are seeing omnichannel, and we feel strongly that by closing these underperforming stores, we'll be able to move the fixed expenses associated with those stores. Some of that will go to a higher level of profitability for the company, and some of that will go toward the right-sizing of the digital investment that needs to happen to continue to drive this new customer to the brand. As we see the younger customers coming in, as we see the reactivated customers coming in, the experience for the breadth of the product categories, being able to visualize them, outfit them, tell the stories about them has—I think the team has done a tremendous job in driving that visual representation of the brand. It is the best expression of the brand. We're not giving up on stores at all. We are right-sizing the portfolio. If you do the math, this ends up at about being 450 stores with this round of closures. We think we're leaving very few markets. It is really about a thinning out of existing markets. The customers will still have a close-by store. Just to reinforce, we've seen with the closures, most recently with the fourth quarter closures, that we are still transferring slightly higher than 60% of those customers and sales to nearby stores or online. As we're doing that, we're just right-sizing the business to the demands of the customer and being able to reallocate our resources to the right channel. I think sub-brands have illustrated to us and substantiated our theory that this customer wants more choices and is willing to pay for them, meaning she's willing to pay more for more fashion. Our experience with the response to these sub-brands and the halo effect that it provides to the core business is best expressed online. It became very, very clear to us that it was time to restructure our portfolio to a digitally led perspective. I hope that answered that. Very much so. Thank you. Last one, can you square the circle? You mentioned it there, the 60% retention, but full-year negligible sales impact of closing the stores. Is that just some sort of function of when you're closing them, the fact that you retain, maybe increase marketing and other online channels, just how you get to that kind of neutral impact? Thanks. Right. Most of those stores will close toward the end of the fourth quarter. At the same time, we'll be ramping up our marketing spend in relationship to that. Based on what we've learned from our digital marketing investments over the last 18 months, we have a high confidence level in our ability to offset the small amount that does not naturally transfer with new customer acquisition through the digital channel. Thank you. Those stores, by the way, are very, very low volume. It is less of a hill to climb in terms of replacing those revenue dollars. Great. Thank you. Thanks. Thank you. We have reached the end of the question-and-answer session. I would like to turn the floor back to CEO Lisa Harper for closing remarks. Great. Thanks so much for joining us today. We look forward to sharing the progress in our next call as we reflect on the Q2. Thanks so much. Thank you. This does conclude today's conference, and you may disconnect your line at this time. Thank you for your participation, and have a great day.