Torrid Holdings (CURV) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Our business is sensitive to consumer spending and general economic conditions, and an economic slowdown or inflationary pressures could adversely affect our financial performance
2. 02Our business is dependent upon our ability to identify and respond to changes in customer preferences and other related factors. Our inability to identify or respond to these new trends may lead to inventory markdowns and write-offs, which could adversely affect our business and our brand image
3. 03We could face increased competition from other brands or retailers that could adversely affect our ability to generate higher net sales and margins, as well as our ability to obtain favorable store locations
4. 04We rely on third parties to drive traffic to our website, and these providers may change their algorithms or pricing in ways that could negatively impact our business, operations, financial condition and prospects
5. 05Our ability to attract customers to our physical stores that are located in shopping centers depends on the success of these shopping centers, and any decrease in customer traffic in these shopping centers could cause our net sales and profitability to be less than expected
6. 06If we are unable to successfully adapt to consumer shopping preferences and develop and maintain a relevant and reliable omni-channel experience for our customers, our financial performance and brand image could be adversely affected
7. 07Our growth strategy is dependent on a number of factors, any of which could strain our resources or delay or prevent the successful penetration into new markets
8. 08We have, and will continue to have, significant lease obligations. We are subject to risks associated with leasing substantial amounts of space, including future increases in occupancy costs and the need to generate cash flow to meet our lease obligations
9. 09Our failure to attract and retain employees that reflect our brand image, embody our culture and possess the appropriate skill set could adversely affect our business and our results of operations
10. 10there will be sufficient sources of suitable temporary personnel to meet our demand. Any such failure to meet our staffing needs or any material increases in employee turnover rates could have a material adverse effect on our business or results of operations
11. 11Failure to effectively utilize information systems and implement new technologies could disrupt our business or reduce our sales or profitability
12. 12Unauthorized disclosure of sensitive or confidential information, whether through a breach of our computer system or otherwise, could severely hurt our business
13. 13Use of social media, emails and text messages may adversely impact our reputation or subject us to fines or other penalties
14. 14We may recognize impairments on definite-lived assets

Risks Related to the Manufacturing, Processing and Supply of Our Products

1. 15The raw materials used to manufacture our products and our transportation and labor costs are subject to availability constraints and price volatility, including as a result of climate change-related governmental actions, which could result in increased costs
2. 16The interruption of the flow of merchandise from international manufacturers could disrupt our supply chain, including as a result of the imposition of additional duties, tariffs and other charges on imports and exports
3. 17We source a significant amount of our product receipts from China, which exposes us to risks inherent in doing business there
4. 18We rely upon independent third-party transportation providers for substantially all of our product shipments and are subject to increased shipping costs as well as the potential inability of our third-party transportation providers to deliver on a timely basis

Risks Related to Government Regulation and Litigation

1. 19privacy, security, and data protection laws and regulations, or other such future privacy, security, and data protection laws and
2. 20Rulemaking changes and regulatory initiatives implemented by the Consumer Financial Protection Bureau (the “CFPB”) may result in adverse effects to our income streams, profitability and results of operations
3. 21District Court for the Northern District of Texas issued a preliminary injunction prohibiting the order from taking effect. That
4. 22We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business
5. 23There are claims made against us from time to time that can result in litigation or regulatory proceedings which could distract management from our business activities and result in significant liability
6. 24regulatory proceedings against us could result in unexpected expenses, legal liability and injunctions against us or restrictions placed upon us, which could disrupt our operations, preclude us from selling products, or otherwise have a material adverse effect on our operations, financial results and our reputation
7. 25Changes in laws, including employment laws and laws related to our merchandise, could make conducting our business more expensive or otherwise change the way we do business
8. 26Changes in tax laws or regulations or in our operations may impact our effective tax rate and may adversely affect our business, financial condition and results of operations
9. 27Government or consumer concerns about product safety could result in regulatory actions, recalls or changes to laws, which could harm our reputation, increase costs or reduce sales
10. 28We may be unable to protect our trademarks or other intellectual property rights, which could harm our business

Risks Related to Our Indebtedness

1. 29Our indebtedness and lease obligations could adversely affect our financial flexibility and our competitive position
2. 30Our indebtedness may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations
3. 31In addition, we are required to maintain compliance with various financial ratios in the ABL Facility

Risks Related to Ownership of Our Common Stock

1. 32We are a "controlled company" and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. In addition, Sycamore’s interests may conflict with our interests and the interests of other stockholders
2. 33Our stock price has been volatile or may decline regardless of our operating performance
3. 34Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares
4. 35Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable
5. 36We have never declared nor paid any cash dividends
6. 37applicable stock exchange listing requirements and investors may lose confidence in our financial reporting, which could have a material adverse effect on the trading price of our stock
7. 38Our operations and financial performance have been affected by, and may continue to be affected by, infectious disease outbreaks
8. 39We depend on key members of our executive management team and may not be able to retain or replace these individuals or recruit additional personnel, which could harm our business
9. 40If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
10. 41The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain qualified Board members
11. 42War, terrorism and other catastrophes could negatively impact our customers, places where we do business and our expenses