Torrid Jumps 25% as Tariff Refunds Lift Its EBITDA Outlook

Torrid Holdings (CURV) raised its full-year adjusted EBITDA outlook on the back of an $11.1 million tariff refund benefit and a return to positive comparable sales in July, sending the shares up 25.11% to 2.79 by 13:53 GMT on September 4, 2026.

Torrid Holdings Inc. (CURV) gave investors two things on its second-quarter fiscal 2026 call that they had not had in a while: a month of positive comparable sales, and a higher full-year profit outlook. The market took both. The plus-size apparel retailer's shares were changing hands at 2.79 as of 13:53 GMT on September 4, 2026, up 25.11% from the previous close of 2.23, having traded between 2.40 and 2.85 on the session.

That is a violent move for a single quarter, and the size of it says as much about where the stock had been sitting as about what was announced. A 25% day on a low-single-digit share price is the market repricing a company it had largely written off, not one it has decided is thriving.

A sales decline the company pushed past

The quarter itself was not a growth quarter. Sales declined, and the profit beat came from the cost and mix side rather than from customers spending more. What the company offered instead was a timing argument: comparable sales — the measure that strips out store openings and closures to show whether the same shops and channels are selling more than a year ago — turned positive in July, after the quarter's reported period was largely set.

That is a familiar structure in specialty retail. A weak reported quarter is paired with a stronger recent month to argue that the trough is behind. It is a real signal only if the improvement holds through the back half, when the comparison base and the holiday calendar do more of the work. July is one month, and one month of positive comps in a summer clearance period is a data point rather than a trend.

The other pillar the company leaned on was sub-brand growth. Torrid has been extending its main label into distinct sub-brands, a strategy retailers use to reach adjacent customer segments without diluting the flagship name or opening new stores. Sub-brands can lift average basket size and give merchandisers something new to feature, but they also add complexity to inventory buying — and inventory discipline is what determines whether an apparel turnaround shows up in margin or in markdowns.

The $11.1 million question inside the raised guidance

The single largest number to come out of the call was an $11.1 million tariff refund benefit, which the company cited as it lifted its full-year adjusted EBITDA guidance. Adjusted EBITDA — earnings before interest, taxes, depreciation and amortization, with certain items excluded — is the metric most leveraged retailers steer by, because it is the one debt covenants and credit analysts tend to key off.

The distinction that matters for anyone valuing the shares is whether the raise is operating or one-off. A tariff refund is cash returned on duties previously paid; it is real money, and it flows to the bottom line, but it does not recur and it does not tell you anything about whether the customer is coming back. Any part of the guidance increase attributable to that $11.1 million is, in effect, a balance-sheet event dressed as an earnings event. The part attributable to better gross margin, tighter inventory or the sub-brand mix is the part that carries into fiscal 2027.

The details of the call were reported by GuruFocus. The practical exercise for shareholders is to strip the refund out of the raised outlook and ask what is left. If the residual raise is thin, the stock's move today is pricing a recovery the operating results have not yet delivered.

Why a refund is showing up in a retailer's profit line at all

Tariff refunds have become a recurring feature of apparel earnings because apparel is one of the most tariff-exposed categories in American retail. Duties are paid at import, well before a garment is sold, so a change in classification, an exclusion granted after the fact, or a reversal of a duty can generate a cash return that lands quarters after the original outlay. For a company importing at scale, those refunds can be material relative to a year's operating profit.

They cut both ways. The same mechanism that hands a retailer a windfall this year can hand it an unbudgeted cost next year if duty rates move against it. Investors treating the $11.1 million as a permanent improvement to the earnings base are making an assumption about trade policy, not about Torrid's merchandising.

How the move sits against a flat tape

The broad market gave Torrid no help on the day. The S&P 500 tracker (SPY) was at $772.27, down 0.12%; the Dow tracker (DIA) was at $535.50, down 0.27%; only the Nasdaq 100 tracker (QQQ) was higher, at $720.49, up 0.39%. A 25% single-stock move against benchmarks moving fractions of a percent is entirely idiosyncratic — this is a company-specific repricing, not a sector rotation into small-cap retail.

That matters for how durable the move is likely to be. Rallies driven by a guidance raise on a stock with a small float and a low price tend to include a mechanical component from short covering, and they tend to give back ground if the next quarter does not confirm the story.

What decides whether the July turn sticks

Three things will settle this. First, whether positive comparable sales extend beyond July into the autumn selling season, when discounting is less of a crutch. Second, whether the sub-brands are additive — pulling in customers who were not already buying the core label — or simply cannibalising it, which shows up as flat total sales with rising complexity. Third, whether the raised EBITDA outlook survives the removal of the tariff refund.

None of those will be answered before the third-quarter report. Until then, holders of CURV own a stock that has just repriced 25% higher on a quarter in which sales fell, on the strength of one month of trading and one cash refund. That is a defensible bet on an inflection, but it is a bet on an inflection, and it should be sized as one.

Key facts

• CURV share price: 2.79, +25.11% as of 13:53 GMT, Sept. 4, 2026 (prev close 2.23)
• Tariff refund benefit: $11.1 million, cited in raised full-year adjusted EBITDA outlook
• Comparable sales: Returned to positive in July, after a Q2 sales decline
• Session range: 2.40–2.85 on Sept. 4, 2026

Frequently asked questions

Why did Torrid Holdings stock rise 25% ?

Torrid shares rose 25.11% to 2.79 as of 13:53 GMT on September 4, 2026, after the company's second-quarter fiscal 2026 earnings call. Management reported a return to positive comparable sales in July, growth in its sub-brands, and raised its full-year adjusted EBITDA outlook helped by an $11.1 million tariff refund benefit, despite an overall sales decline in the quarter.

What is the $11.1 million tariff refund?

It is a benefit Torrid cited when raising its full-year adjusted EBITDA guidance. Tariff refunds arise when import duties previously paid on goods are returned, typically after a reclassification, exclusion or duty reversal. The cash is real and flows to profit, but it is a one-off item rather than an improvement in underlying trading performance, so it does not necessarily repeat next year.

What does 'comparable sales' mean and why does July matter?

Comparable sales measure revenue from stores and channels open in both the current and prior year, stripping out the effect of openings and closures. It shows whether the existing business is genuinely selling more. Torrid said comps turned positive in July, after the second quarter's reported period, which management presented as evidence the sales decline may be bottoming out.

Is the raised EBITDA guidance a sign of operating improvement?

Only partly. The company attributed part of the increase to the $11.1 million tariff refund, which is non-recurring. Investors assessing the quality of the raise should separate that refund from any improvement driven by gross margin, inventory discipline or sub-brand mix, since only the latter carries into future years. The split determines how much of the stock's move is justified.

How did the broader market perform the same day?

Benchmarks were close to flat. As of 13:53 GMT on September 4, 2026, the S&P 500 tracker SPY was at $772.27, down 0.12%; the Dow tracker DIA was at $535.50, down 0.27%; and the Nasdaq 100 tracker QQQ was at $720.49, up 0.39%. Torrid's 25% move was therefore entirely company-specific rather than a market or sector effect.

What should investors watch next from Torrid?

Three things: whether positive comparable sales extend past July into the autumn and holiday selling season; whether the sub-brands add new customers rather than cannibalising the core label; and whether the raised adjusted EBITDA outlook holds once the one-off tariff refund is excluded. The third-quarter report is the next scheduled point at which those questions can be answered.

Sources

• Torrid Holdings Inc (CURV) (Q2 2026) Earnings Call Highlights: Sub-Brand Growth and Tariff ... — GuruFocus

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