Torrid Holdings Inc

Previous wording

We are a direct-to-consumer brand dedicated to offering a diverse assortment of stylish apparel, intimates, and accessories skillfully designed for curvy women in North America. Specializing in sizes 10 to 30, our primary focus is on providing fashionable, comfortable, and affordable options that meet the unique needs of our customers. Our extensive collection features high quality merchandise, including tops, bottoms, denim, dresses, intimates, activewear, footwear, and accessories. Our products are exclusive to us, with few exceptions, and each product is meticulously crafted to cater to the needs of the curvy woman, empowering her to love the way she looks and feels. Our collections are artfully curated to suit all aspects of our customers’ lives, including casual weekends, work, dressy and special occasions. Understanding the importance of affordability, we aim to keep our prices reasonable without compromising on quality. This allows us to build a meaningful connection with our customers, distinguishing us from other brands that often overlook plus-size consumers. Our brand experience and product offerings establish us as a differentiated and reliable choice for plus-size customers, which we believe sets us apart in the market. We strive to be everything our customer needs in her closet, consistently delivering products that make her feel confident and stylish.

Current wording

We are a direct-to-consumer brand in North America dedicated to offering a diverse assortment of stylish apparel, intimates, and accessories skillfully designed for curvy women. Specializing in sizes 10 to 30, our primary focus is on providing fashionable, comfortable, and affordable options that meet the unique needs of our customers. Our extensive collection features high quality merchandise, including tops, bottoms, denim, dresses, intimates, activewear, footwear, and accessories. Our products are exclusive to us, with few exceptions, and each product is meticulously crafted to cater to the needs of the curvy woman, empowering her to love the way she looks and feels. Our collections are artfully curated to suit all aspects of our customers’ lives, including casual weekends, work, dressy and special occasions. Understanding the importance of affordability, we aim to keep our prices reasonable without compromising on quality. This allows us to build a meaningful connection with our customers, distinguishing us from other brands that often overlook plus-size consumers. Our brand experience and product offerings establish us as a differentiated and reliable choice for plus-size customers, which we believe sets us apart in the market. We strive to be everything our customer needs in her closet, consistently delivering products that make her feel confident and stylish.

Previous wording

(A)Comparable sales for the three- and six-month periods ended August 3, 2024 compares sales for the 13- and 26-week periods ended August 3, 2024, respectively, with sales for the 13- and 26-week periods ended August 5, 2023.

Current wording

(A)Comparable sales for the three- and nine-month periods ended November 2, 2024 compares sales for the 13- and 39-week periods ended November 2, 2024, respectively, with sales for the 13- and 39-week periods ended November 4, 2023.

Previous wording

(B)Please refer to “Results of Operations” for a reconciliation of net income to Adjusted EBITDA.

Current wording

(B)Please refer to “Results of Operations” for a reconciliation of net (loss) income to Adjusted EBITDA.

Previous wording

Comparable Sales. We define comparable sales for any given period as the sales of our e-Commerce operations and stores that we have included in our comparable sales base during that period. We include a store in our comparable sales base after it has been open for 15 full fiscal months. If a store is closed during a fiscal year, it is only included in the computation of comparable sales for the full fiscal months in which it was open. Comparable sales for the three- and six-month periods ended August 3, 2024 compares sales for the 13- and 26-week periods ended August 3, 2024, respectively, with sales for the 13- and 26-week periods ended August 5, 2023. Partial fiscal months are excluded from the computation of comparable sales. We apply current year foreign currency exchange rates to both current year and prior year comparable sales to remove the impact of foreign currency fluctuation and achieve a consistent basis for comparison. Comparable sales allow us to evaluate how our unified commerce business is performing exclusive of the effects of non-comparable sales and new store openings.

Current wording

Comparable Sales. We define comparable sales for any given period as the sales of our e-Commerce operations and stores that we have included in our comparable sales base during that period. We include a store in our comparable sales base after it has been open for 15 full fiscal months. If a store is closed during a fiscal year, it is only included in the computation of comparable sales for the full fiscal months in which it was open. Comparable sales for the three- and nine-month periods ended November 2, 2024 compares sales for the 13- and 39-week periods ended November 2, 2024, respectively, with sales for the 13- and 39-week periods ended November 4, 2023. Partial fiscal months are excluded from the computation of comparable sales. We apply current year foreign currency exchange rates to both current year and prior year comparable sales to remove the impact of foreign currency fluctuation and achieve a consistent basis for comparison. Comparable sales allow us to evaluate how our unified commerce business is performing exclusive of the effects of non-comparable sales and new store openings.

Previous wording

Net Sales. Net sales reflects our revenues from the sale of our merchandise, shipping and handling revenue received from e-Commerce sales, PLCC Funds and gift card breakage income, less returns, discounts and loyalty points/awards. Revenue from our stores is recognized at the time of sale and revenue from our e-Commerce channel is recognized upon shipment of the merchandise to the home of the customer; except in cases where the merchandise is shipped to a store and revenue is recognized when the customer retrieves the merchandise from the store. Net sales are impacted by the size of our active customer base, product assortment and availability, marketing and promotional activities and the spending habits of our customers. Net sales are also impacted by the migration of single-channel customers (i.e., customers shopping only in-store or online) to omni-channel customers (i.e., customers shopping both in-store and online), who on average spend significantly more than single-channel customers in a given year.

Current wording

Net Sales. Net sales reflects our revenues from the sale of our merchandise, shipping and handling revenue received from e-Commerce sales, PLCC Funds and gift card breakage income, less returns, discounts and loyalty points/awards. Revenue from our stores is recognized at the time of sale and revenue from our e-Commerce channel is recognized upon shipment of the merchandise to the customer; except in cases where the merchandise is shipped to a store and revenue is recognized when the customer retrieves the merchandise from the store. Net sales are impacted by the size of our active customer base, product assortment and availability, marketing and promotional activities and the spending habits of our customers. Net sales are also impacted by the migration of single-channel customers (i.e., customers shopping only in-store or online) to omni-channel customers (i.e., customers shopping both in-store and online), who on average spend significantly more than single-channel customers in a given year.

Previous wording

Gross Profit. Gross profit is equal to our net sales less cost of goods sold. Our cost of goods sold includes merchandise costs, freight, inventory shrinkage, payroll expenses associated with the merchandising department, distribution center expenses and store occupancy expenses, including rent, common area maintenance charges, real estate taxes and depreciation. Merchandising payroll costs and store occupancy costs included within cost of goods sold are largely fixed and do not necessarily increase as volume increases. We review our inventory levels on an ongoing basis in order to identify slow-moving merchandise and generally use markdowns to clear that merchandise. The timing and level of markdowns are driven primarily by customer acceptance of our merchandise. The primary drivers of our merchandise costs include the raw materials, labor in the countries where we source our merchandise, customs duties, and logistics costs.

Current wording

Merchandising payroll costs and store occupancy costs included within cost of goods sold are largely fixed and do not necessarily increase as volume increases. We review our inventory levels on an ongoing basis in order to identify slow-moving merchandise and generally use markdowns to clear that merchandise. The timing and level of markdowns are driven primarily by customer acceptance of our merchandise. The primary drivers of our merchandise costs include the raw materials, labor in the countries where we source our merchandise, customs duties, and logistics costs.

Previous wording

The following table provides a reconciliation of net income to Adjusted EBITDA for the periods presented (in thousands):

Current wording

The following table provides a reconciliation of net loss to Adjusted EBITDA for the periods presented (in thousands):

Previous wording

(B)During the three months ended August 3, 2024 and July 29, 2023, share-based compensation includes $1.1 million and $0.2 million, respectively, for awards that will be settled in cash as they are accounted for as share-based compensation in accordance with ASC 718, Compensation—Stock Compensation, similar to awards settled in shares.

Current wording

(B)During the three months ended November 2, 2024 and October 28, 2023, share-based compensation includes $(0.3) million and $0.1 million, respectively, for awards that will be settled in cash as they are accounted for as share-based compensation in accordance with ASC 718, Compensation—Stock Compensation, similar to awards settled in shares.

Previous wording

Net sales decreased $4.5 million, or 1.6%, to $284.6 million for the three months ended August 3, 2024, from $289.1 million for the three months ended July 29, 2023. This decrease was primarily driven by a decrease in sales transactions and a decrease in PLCC Funds, partially offset by improved pricing strategies. The total number of stores we operate increased by 18 stores, or 2.8%, to 657 stores as of August 3, 2024, from 639 stores as of July 29, 2023.

Current wording

Net sales decreased $11.6 million, or 4.2%, to $263.8 million for the three months ended November 2, 2024, from $275.4 million for the three months ended October 28, 2023. This decrease was primarily driven by a decrease in sales transaction values and a decrease in PLCC Funds, partially offset by improved pricing strategies. The total number of stores we operate increased by 12 stores, or 1.9%, to 655 stores as of November 2, 2024, from 643 stores as of October 28, 2023.

Previous wording

Gross profit for the three months ended August 3, 2024 increased $7.6 million, or 7.4%, to $110.3 million, from $102.7 million for the three months ended July 29, 2023. This increase was primarily due to reduced product costs and an increase in sales of regular-priced products, partially offset by decreased net sales. Gross profit as a percentage of net sales increased 3.2% to 38.7% for the three months ended August 3, 2024 from 35.5% for the three months ended July 29, 2023. This increase was primarily driven by reduced product costs and an increase in sales of regular-priced products, partially offset by decreased net sales.

Current wording

Gross profit for the three months ended November 2, 2024 increased $3.7 million, or 4.0%, to $95.2 million, from $91.5 million for the three months ended October 28, 2023. This increase was primarily due to reduced product costs and an increase in sales of regular-priced products, partially offset by decreased net sales. Gross profit as a percentage of net sales increased 2.9% to 36.1% for the three months ended November 2, 2024 from 33.2% for the three months ended October 28, 2023. This increase was primarily driven by reduced product costs and an increase in sales of regular-priced products, partially offset by decreased net sales.

Previous wording

Selling, general and administrative expenses for the three months ended August 3, 2024 increased $7.2 million, or 10.4%, to $76.8 million, from $69.6 million for the three months ended July 29, 2023. The increase was primarily due to a $3.6 million increase in headquarters general and administrative expenses driven by a $2.1 million increase in severance costs for certain key management positions, a $2.4 million increase in performance bonuses and a $1.1 million increase in other store operating costs. Selling, general and administrative expenses as a percentage of net sales increased 2.8% to 27.0% for the three months ended August 3, 2024 from 24.2% for the three months ended July 29, 2023. This increase was primarily driven by increased performance bonuses, headquarters general and administrative expenses and other store operating costs.

Current wording

Selling, general and administrative expenses for the three months ended November 2, 2024 increased $3.0 million, or 4.2%, to $74.9 million, from $71.9 million for the three months ended October 28, 2023. The increase was primarily due to a $3.4 million increase in performance bonuses, a $1.9 million increase in legal expense, and a $1.3 million increase in headquarters general and administrative expenses. These increases were partially offset by a $1.7 million decrease in store payroll costs and a $0.9 million decrease in share-based compensation expense. Selling, general and administrative expenses as a percentage of net sales increased 2.4% to 28.5% for the three months ended November 2, 2024 from 26.1% for the three months ended October 28, 2023. This increase was primarily driven by increased performance bonuses, legal expenses, and headquarters general and administrative expenses, partially offset by a decrease in share-based compensation expense.

Previous wording

Marketing expenses for the three months ended August 3, 2024 increased $0.1 million, or 0.8%, to $13.0 million, from $12.9 million for the three months ended July 29, 2023. Marketing expenses as a percentage of net sales increased 0.1% to 4.6% during the three months ended August 3, 2024 from 4.5% during the three months ended July 29, 2023. The increase in both marketing expenses and marketing expenses as a percentage of net sales was primarily driven by expenses associated with our model search campaign, and an increase in social media spend, partially offset by decreased spend on store and brand marketing, comparison shopping engines, retargeting, photography, and email/SMS marketing.

Current wording

Marketing expenses for the three months ended November 2, 2024 increased $0.3 million, or 2.5%, to $13.1 million, from $12.7 million for the three months ended October 28, 2023. Marketing expenses as a percentage of net sales increased 0.3% to 4.9% during the three months ended November 2, 2024 from 4.6% during the three months ended October 28, 2023. The increase in both marketing expenses and marketing expenses as a percentage of net sales was primarily driven by an increase in social media spend, photography and SMS marketing, partially offset by decreased spend on email marketing and comparison shopping engines.

Previous wording

Interest expense was $9.1 million for the three months ended August 3, 2024, compared to $9.6 million for the three months ended July 29, 2023. The decrease was primarily due to a lower Amended Term Loan Credit Agreement balance due to principal payments and reduced borrowings under the ABL Facility, as amended.

Current wording

Interest expense was $8.8 million for the three months ended November 2, 2024, compared to $9.8 million for the three months ended October 28, 2023. The decrease was primarily due to a lower Amended Term Loan Credit Agreement balance due to principal payments and reduced borrowings under the ABL Facility, as amended.

Previous wording

The provision for income taxes were $7.6 million and $8.8 million for the six months ended August 3, 2024 and July 29, 2023, respectively. Our effective tax rate was 26.9% for the six months ended August 3, 2024 and 32.2% for the six months ended July 29, 2023. The decrease in the effective tax rate for the six months ended August 3, 2024 as compared to the six months ended July 29, 2023 was primarily due to a decrease in the amount of non-deductible compensation for covered employees relative to income before provision for income taxes for the six months ended August 3, 2024.

Current wording

The benefit from income taxes for the three months ended November 2, 2024, was not material and there was a benefit from income taxes of $0.4 million for the three months ended October 28, 2023. Our effective tax rate was 2.1% for the three months ended November 2, 2024 and 12.5% for the three months ended October 28, 2023. The decrease in the effective tax rate for the three months ended November 2, 2024 as compared to the three months ended October 28, 2023 was primarily due to a decrease in the loss before benefit from income taxes during the three months ended November 2, 2024 as compared to the three months ended October 28, 2023.

Previous wording

(B)During the six months ended August 3, 2024 and July 29, 2023, share-based compensation includes $1.4 million and $0.4 million, respectively, for awards that will be settled in cash as they are accounted for as share-based compensation in accordance with ASC 718, Compensation—Stock Compensation, similar to awards settled in shares.

Current wording

(B)During the nine months ended November 2, 2024 and October 28, 2023, share-based compensation includes $1.2 million and $0.4 million, respectively, for awards that will be settled in cash as they are accounted for as share-based compensation in accordance with ASC 718, Compensation—Stock Compensation, similar to awards settled in shares.

Previous wording

(D)Other expenses include certain transaction and litigation fees, severance costs for certain key management positions and the reimbursement of certain management expenses, primarily for travel, incurred by Sycamore on our behalf, which are not considered to be part of our core business.

Current wording

(D)Other expenses include certain transaction and litigation fees (including certain settlement costs), severance costs for certain key management positions and the reimbursement of certain management expenses, primarily for travel, incurred by Sycamore on our behalf, which are not considered to be part of our core business.

Previous wording

Net sales decreased $18.6 million, or 3.2%, to $564.4 million for the six months ended August 3, 2024, from $583.0 million for the six months ended July 29, 2023. This decrease was primarily driven by a decrease in sales transactions and a decrease in PLCC Funds, partially offset by improved pricing strategies. The total number of stores we operate increased by 18 stores, or 2.8%, to 657 stores as of August 3, 2024, from 639 stores as of July 29, 2023.

Current wording

Net sales decreased $30.2 million, or 3.5%, to $828.2 million for the nine months ended November 2, 2024, from $858.4 million for the nine months ended October 28, 2023. This decrease was primarily driven by a decrease in sales transaction values, partially offset by improved pricing strategies. The total number of stores we operate increased by 12 stores, or 1.9%, to 655 stores as of November 2, 2024, from 643 stores as of October 28, 2023.

Previous wording

Gross profit for the six months ended August 3, 2024 increased $12.4 million, or 5.8%, to $225.7 million, from $213.3 million for the six months ended July 29, 2023. This increase was primarily due to reduced product costs, merchandising payroll costs and store occupancy costs, partially offset by decreased net sales. Gross profit as a percentage of net sales increased 3.4% to 40.0% for the six months ended August 3, 2024 from 36.6% for the six months ended July 29, 2023. This increase was primarily driven by decreases in product costs and merchandising payroll costs, partially offset by decreased net sales.

Current wording

Gross profit for the nine months ended November 2, 2024 increased $16.0 million, or 5.3%, to $320.8 million, from $304.8 million for the nine months ended October 28, 2023. This increase was primarily due to reduced product costs, merchandising payroll costs, store occupancy costs and distribution costs, partially offset by decreased net sales. Gross profit as a percentage of net sales increased 3.2% to 38.7% for the nine months ended November 2, 2024 from 35.5% for the nine months ended October 28, 2023. This increase was primarily driven by a decrease in product costs, partially offset by decreased net sales.

Previous wording

Selling, general and administrative expenses for the six months ended August 3, 2024 increased $12.5 million, or 8.9%, to $153.3 million, from $140.8 million for the six months ended July 29, 2023. The increase was primarily due to a $6.8 million increase in headquarters general and administrative expenses, including a $2.2 million increase in severance costs for certain key management positions, a $6.7 million increase in performance bonuses and a $2.0 million increase in other store operating costs, partially offset by a $2.1 million decrease in store and e-Commerce payroll costs. Selling, general and administrative expenses as a percentage of net sales increased 3.0% to 27.2% for the six months ended August 3, 2024 from 24.2% for the six months ended July 29, 2023. This increase was primarily driven by increased performance bonuses, headquarters general and administrative expenses and other store operating costs.

Current wording

Selling, general and administrative expenses for the nine months ended November 2, 2024 increased $15.5 million, or 7.3%, to $228.2 million, from $212.7 million for the nine months ended October 28, 2023. The increase was primarily due to a $10.1 million increase in performance bonuses, an $8.2 million increase in headquarters general and administrative expenses, and a $1.9 million increase in legal expense. This increase was partially offset by a $3.8 million decrease in store payroll costs and a $1.4 million decrease in shared-based compensation. Selling, general and administrative expenses as a percentage of net sales increased 2.7% to 27.5% for the nine months ended November 2, 2024 from 24.8% for the nine months ended October 28, 2023. This increase was primarily driven by increased performance bonuses and headquarters general and administrative expenses.

Previous wording

Marketing expenses for the six months ended August 3, 2024 decreased $0.4 million, or 1.6%, to $25.8 million, from $26.2 million for the six months ended July 29, 2023. The decrease was primarily due to decreased spend on store and brand marketing, comparison shopping engines, retargeting, photography, email/SMS marketing, and marketing team payroll, partially offset by expenses associated with our model search campaign, and an increase in social media spend. Marketing expenses as a percentage of net sales increased 0.1% to 4.6% during the six months ended August 3, 2024 from 4.5% during the six months ended July 29, 2023. The increase was primarily driven by a deleverage of our marketing expenses as a result of lower net sales.

Current wording

Marketing expenses for the nine months ended November 2, 2024 decreased $0.1 million, or 0.3%, to $38.9 million, from $39.0 million for the nine months ended October 28, 2023. The decrease was primarily due to decreased spend on store and brand marketing, comparison shopping engines, retargeting, photography, email/SMS marketing, and marketing team payroll, partially offset by expenses associated with our model search campaign, and an increase in social media spend. Marketing expenses as a percentage of net sales increased 0.2% to 4.7% during the nine months ended November 2, 2024 from 4.5% during the nine months ended October 28, 2023. The increase was primarily driven by a deleverage of our marketing expenses as a result of lower net sales.

Previous wording

Interest expense was $18.5 million for the six months ended August 3, 2024, compared to $19.1 million for the six months ended July 29, 2023. The decrease was primarily due to a lower Amended Term Loan Credit Agreement balance due to principal payments and reduced borrowings under the ABL Facility, as amended.

Current wording

Interest expense was $27.3 million for the nine months ended November 2, 2024, compared to $28.8 million for the nine months ended October 28, 2023. The decrease was primarily due to a lower Amended Term Loan Credit Agreement balance due to principal payments and reduced borrowings under the ABL Facility, as amended.

Previous wording

The provision for income taxes were $3.1 million and $4.0 million for the three months ended August 3, 2024 and July 29, 2023, respectively. Our effective tax rate was 26.9% for the three months ended August 3, 2024 and 37.9% for the three months ended July 29, 2023. The decrease in the effective tax rate for the three months ended August 3, 2024 as compared to the three months ended July 29, 2023 was primarily due to a decrease in the amount of non-deductible compensation for covered employees relative to income before provision for income taxes for the three months ended August 3, 2024.

Current wording

The provision for income taxes were $7.5 million and $8.4 million for the nine months ended November 2, 2024 and October 28, 2023, respectively. Our effective tax rate was 28.0% for the nine months ended November 2, 2024 and 34.8% for the nine months ended October 28, 2023. The decrease in the effective tax rate for the nine months ended November 2, 2024 as compared to the nine months ended October 28, 2023 was primarily due to a decrease in the amount of non-deductible compensation for covered employees relative to income before provision for income taxes for the nine months ended November 2, 2024.

Previous wording

Our business relies on cash flows from operations as our primary source of liquidity. We do, however, have access to additional liquidity, if needed, through borrowings under our ABL Facility, as amended. Availability under the ABL Facility, as amended, as of the end of the second quarter of fiscal year 2024, was $99.9 million, which reflects no borrowings. Our primary cash needs are for merchandise inventories, payroll, rent for our stores, headquarters and distribution center, capital expenditures associated with opening new stores and updating existing stores, logistics and information technology. We also need cash to fund our interest and principal payments on the Amended Term Loan Credit Agreement, and make discretionary repurchases of our common stock. The most significant components of our working capital are cash and cash equivalents, merchandise inventories, prepaid expenses and other current assets, accounts payable, accrued and other current liabilities and operating lease liabilities. We believe that cash generated from operations and the availability of borrowings under our ABL Facility, as amended, or other financing arrangements will be sufficient to meet working capital requirements and anticipated capital expenditures for at least the next 12 months. There can be no assurance, however, that our business will generate sufficient cash flows from operations or that future borrowings will be available under our ABL Facility, as amended, or otherwise to enable us to service our indebtedness, or to make capital expenditures in the future. Our future operating performance and our ability to service or extend our indebtedness will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Current wording

Our business relies on cash flows from operations as our primary source of liquidity. We do, however, have access to additional liquidity, if needed, through borrowings under our ABL Facility, as amended. Availability under the ABL Facility, as amended, as of the end of the third quarter of fiscal year 2024, was $107.8 million, which reflects no borrowings. Our primary cash needs are for merchandise inventories, payroll, rent for our stores, headquarters and distribution center, capital expenditures associated with opening new stores and updating existing stores, logistics and information technology. We also need cash to fund our interest and principal payments on the Amended Term Loan Credit Agreement, and make discretionary repurchases of our common stock. The most significant components of our working capital are cash and cash equivalents, merchandise inventories, prepaid expenses and other current assets, accounts payable, accrued and other current liabilities and operating lease liabilities. We believe that cash generated from operations and the availability of borrowings under our ABL Facility, as amended, or other financing arrangements will be sufficient to meet working capital requirements and anticipated capital expenditures for at least the next 12 months. There can be no assurance, however, that our business will generate sufficient cash flows from operations or that future borrowings will be available under our ABL Facility, as amended, or otherwise to enable us to service our indebtedness, or to make capital expenditures in the future. Our future operating performance and our ability to service or extend our indebtedness will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Previous wording

In July 2023, we implemented a strategic reduction of approximately 5% of our workforce employed in our headquarters in City of Industry, California. Costs to implement the workforce reduction were comprised primarily of severance payments and continuing health care coverage over the severance period. In July 2023, we recognized $1.5 million of expense related to the workforce reduction in selling, general and administrative expenses in our condensed consolidated statements of operations and comprehensive income. None of our employees are represented by a labor union or are party to a collective bargaining agreement.

Current wording

In July 2023, we implemented a strategic reduction of approximately 5% of our workforce employed in our headquarters in City of Industry, California. Costs to implement the workforce reduction were comprised primarily of severance payments and continuing health care coverage over the severance period. In July 2023, we recognized $1.5 million of expense related to the workforce reduction in selling, general and administrative expenses in our condensed consolidated statements of operations and comprehensive (loss) income. None of our employees are represented by a labor union or are party to a collective bargaining agreement.

Previous wording

Net cash provided by operating activities during the six months ended August 3, 2024 was $68.4 million compared to $31.7 million during the six months ended July 29, 2023. The increase in cash provided by operating activities during the six months ended August 3, 2024 was primarily as a result of increases in net income, accounts payable and accrued expenses and other current liabilities, partially offset by a smaller reduction in inventory purchases compared to the six months ended July 29, 2023.

Current wording

Net cash provided by operating activities during the nine months ended November 2, 2024 was $65.4 million compared to $33.7 million during the nine months ended October 28, 2023. The increase in cash provided by operating activities during the nine months ended November 2, 2024 was primarily as a result of increases in net income, accounts payable and accrued expenses and other current liabilities, partially offset by a larger increase in prepaid expenses and other current assets compared to the nine months ended October 28, 2023.

Previous wording

Net cash flows used in investing activities during the six months ended August 3, 2024 was $10.2 million, compared to $9.6 million during the six months ended July 29, 2023. The increase in cash used in investing activities was primarily as a result of increased capital expenditures related to the opening of new stores and store relocations, partially offset by a decrease in capital expenditures in our West Jefferson, Ohio distribution center during the six months ended August 3, 2024, compared to the six months ended July 29, 2023.

Current wording

Net cash flows used in investing activities during the nine months ended November 2, 2024 was $12.6 million, compared to $15.2 million during the nine months ended October 28, 2023. The decrease in cash used in investing activities was primarily as a result of decreased capital expenditures related to the opening of new stores and store relocations and a decrease in capital expenditures in our West Jefferson, Ohio distribution center, partially offset by an increase in store maintenance costs during the nine months ended November 2, 2024, compared to the nine months ended October 28, 2023.

Previous wording

Net cash used in financing activities during the six months ended August 3, 2024 was $16.0 million compared to $17.1 million during the six months ended July 29, 2023. The decrease in net cash used in financing activities was primarily due to a decrease in net repayments related to the ABL Facility, as amended.

Current wording

Net cash used in financing activities during the nine months ended November 2, 2024 was $20.4 million compared to $16.3 million during the nine months ended October 28, 2023. The increase in net cash used in financing activities was primarily due to an increase in net repayments related to the ABL Facility, as amended.

Previous wording

As of August 3, 2024, we had $296.6 million of outstanding indebtedness, net of unamortized original issue discount and debt financing costs, consisting of term loans under the Amended Term Loan Credit Agreement. As of August 3, 2024, we had no borrowings under the ABL Facility, as amended. Please refer to “Note 12—Debt Financing Arrangements” for further discussion regarding our indebtedness.

Current wording

As of November 2, 2024, we had $292.6 million of outstanding indebtedness, net of unamortized original issue discount and debt financing costs, consisting of term loans under the Amended Term Loan Credit Agreement. As of November 2, 2024, we had no borrowings under the ABL Facility, as amended. Please refer to “Note 12—Debt Financing Arrangements” for further discussion regarding our indebtedness.