Torrid Holdings Inc.

Note 1. Basis of Presentation and Description of the Business

Corporate Structure

Torrid Holdings Inc. is a Delaware corporation formed on October 29, 2019 and capitalized on February 20, 2020. Sycamore Partners Management, L.P. (“Sycamore”) owns a majority of the voting power of Torrid Holdings Inc.’s outstanding common stock. Torrid Parent Inc. is a Delaware corporation formed on June 4, 2019 and is a wholly owned subsidiary of Torrid Holdings Inc. Torrid Intermediate LLC, formerly known as Torrid Inc., is a Delaware limited liability company formed on June 18, 2019 and a wholly owned subsidiary of Torrid Parent Inc. Torrid LLC is a wholly owned subsidiary of Torrid Intermediate LLC. Substantially all of Torrid Holdings Inc.’s financial position, operations and cash flows are generated through its wholly owned indirect subsidiary, Torrid LLC.

Throughout these financial statements, the terms “Torrid,” “we,” “us,” “our,” the “Company” and similar references refer to Torrid Holdings Inc. and its consolidated subsidiaries.

Fiscal Year

Our fiscal year ends on the Saturday nearest to January 31 and each fiscal year is generally comprised of four 13-week quarters (although in years with 53 weeks, the fourth quarter is comprised of 14 weeks). Fiscal years 2026 and 2025 are 52-week years. Fiscal years are identified according to the calendar year in which they begin. For example, references to “fiscal year 2026” or similar references refer to the fiscal year ending January 30, 2027. References to the first quarter of fiscal years 2026 and 2025 and to the three-month periods ended May 2, 2026 and May 3, 2025, respectively, refer to the 13-week periods then ended.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the three-month periods ended May 2, 2026 and May 3, 2025 are not necessarily indicative of the results that may be expected for any future interim periods, the fiscal year ending January 30, 2027, or for any future fiscal year.

The condensed consolidated balance sheet information at January 31, 2026 has been derived from the audited consolidated financial statements at that date, but does not include all of the disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements and related footnotes should be read in conjunction with our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 (the “2025 Form 10-K”). The unaudited condensed consolidated financial statements include Torrid and those of our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Description of Business

We are a direct-to-consumer brand of apparel, intimates and accessories in North America aimed at fashionable women who are curvy and wear sizes 10 to 30. We generate revenues primarily through our e-Commerce platform www.torrid.com and our stores in the United States of America, Puerto Rico and Canada.

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including, but not limited to, those related to merchandise returns, the value of future loyalty program award redemptions, net realizable value of our inventory, share-based compensation, and incremental borrowing rate and probability assessments of exercising renewal options on leases. We base our estimates on the best information available at the time, our experiences, and various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Significant Accounting Policies

A description of our significant accounting policies is included in the audited consolidated financial statements in our 2025 Form 10-K. No changes to significant accounting policies have occurred since January 31, 2026.

Inventory

Our inventory is comprised solely of finished goods.

Note 2. Accounting Standards

Recently Adopted Accounting Standards

We did not adopt any new accounting standards during the three-month period ended May 2, 2026.

Accounting Standards Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”), which clarified the effective date of ASU 2024-03. ASU 2024-03 is intended to improve disclosures about a public business entity's expenses, primarily through additional disaggregation of income statement expenses. ASU 2024-03 will be effective for the annual period beginning after December 15, 2026 and interim reporting periods within the annual reporting period beginning after December 15, 2027, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact of the standard on our financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software(“ASU 2025-06”). The ASU primarily updates the accounting for internal-use software by replacing former stage-based rules with a principles-based framework. Costs associated with internal-use software will be capitalized only when management has authorized and committed funding and it is probable that the project will be completed and the software will be used to perform the intended function. ASU 2025-06 will be effective for the annual period beginning after December 15, 2027 and interim periods therein, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date, retrospectively to any or all prior periods presented in the financial statements or on a modified prospective basis. We are currently evaluating the impact of the standard on our financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements(“ASU 2025-11”). ASU 2025-11 is intended to update the guidance in Topic 270 by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 will be effective for the interim reporting periods within annual reporting periods beginning after December 15, 2027, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact of the standard on our financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements(“ASU 2025-12”). ASU 2025-12 is intended to correct, clarify, or otherwise improve U.S. GAAP. ASU 2025-12 addresses 33 issues that span a wide range of topics such as clarifying diluted EPS calculations when a loss from continuing operations exists, and methods to account for treasury stock retirements, and is not intended to result in significant changes for most entities. However, to the extent these changes to guidance result in accounting changes, ASU 2025-12 will be effective for the interim reporting periods within annual reporting periods beginning after December 15, 2026, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. Early adoption and transition method can be elected on an issue-by-issue basis. We are currently evaluating the impact of the standard on our financial statements and disclosures.

We have considered all other recent accounting pronouncements and have concluded that there are no other recent accounting pronouncements not yet adopted that are applicable to us, based on current information.

Note 3. Property and Equipment

Property and equipment are summarized as follows (in thousands):

We recorded depreciation expense related to our property and equipment in the amounts of $6.3 million and $9.4 million during the three-month periods ended May 2, 2026 and May 3, 2025, respectively.

We group and evaluate long-lived assets for impairment at the individual store level, which is the lowest level at which individual cash flows can be identified. During the three-month periods ended May 2, 2026 and May 3, 2025, we didnot recognize any impairment charges.

Note 4. Revenue Recognition

Our revenue, disaggregated by product category, consists of the following (in thousands):

Amounts within Apparel include revenues earned from the sale of tops, bottoms, dresses, intimates, sleep wear, swim wear and outerwear. Amounts within Non-apparel include revenues earned from the sale of accessories, footwear and beauty. Amounts within Other primarily represent royalties, profit-sharing and marketing and promotional funds received from the use of private label credit cards (“PLCC Funds”).

We recognize a contract liability when we receive consideration from a customer before our performance obligations under the terms of a contract or an implied arrangement with the customer are satisfied. The opening and closing balances of our contract liabilities are as follows (in thousands):

(1)Amounts are included within accrued and other current liabilities in the condensed consolidated balance sheets.

(2)Amount as of May 2, 2026 consists of $2.3 million within accrued and other current liabilities and $0.2 million within other noncurrent liabilities in the condensed consolidated balance sheet. Amount as of January 31, 2026 consists of $2.5 million within accrued and other current liabilities and $0.2 million within other noncurrent liabilities in the condensed consolidated balance sheet.

(3)Amount as of May 2, 2026 consists of $0.5 million within accrued and other current liabilities and $2.3 million within other noncurrent liabilities in the condensed consolidated balance sheet. Amount as of January 31, 2026 consists of $0.5 million within accrued and other current liabilities and $2.5 million within other noncurrent liabilities in the condensed consolidated balance sheet.

During the three-month period ended May 2, 2026, we recognized revenue of approximately $4.8 million, $2.2 million, $2.3 million and $0.1 million related to our accrued loyalty program, gift cards, deferred revenue and deferred PLCC Funds, respectively, that existed at the beginning of fiscal year 2026. During the three-month period ended May 3, 2025, we recognized revenue of approximately $6.2 million, $3.2 million, $2.8 million and $0.1 million related to our accrued loyalty program, gift cards, deferred revenue and deferred PLCC Funds, respectively, that existed at the beginning of fiscal year 2025.

During the three-month periods ended May 2, 2026 and May 3, 2025, we recorded $0.3 million and $1.8 million, respectively, as a reduction to net sales to reflect the estimated value of future award redemptions under our loyalty program.

Note 5. Related Party Transactions

Services Agreements with Hot Topic

Hot Topic Inc. (“Hot Topic”) is an entity indirectly controlled by affiliates of Sycamore. On March 21, 2019, we entered into an amended and restated services agreement with Hot Topic, which was subsequently amended on August 1, 2019, April 30, 2023 and May 3, 2024 (“Amended and Restated Services Agreement”). Under the Amended and Restated Services Agreement, Hot Topic provides us (or causes applicable third parties to provide) real estate leasing and construction management services. We record payments made to Hot Topic under these service agreements in the applicable expense category in either cost of goods sold, or selling, general and administrative expenses.

During each of the three-month periods ended May 2, 2026 and May 3, 2025, Hot Topic charged us $0.5 million for various services under the applicable service agreements, all of which were recorded as components of selling, general and administrative expenses. As of the end of the first quarter of fiscal year 2026 and the end of fiscal year 2025, we owed $0.4 million and $0.6 million, respectively, to Hot Topic for these services which is included in due to related parties in our condensed consolidated balance sheets.

On August 1, 2019, we entered into a services agreement with Hot Topic, which was subsequently amended on July 31, 2022, September 30, 2022, December 1, 2022, January 1, 2024, and May 30, 2024 (“Amended Reverse Services Agreement”). Under the Amended Reverse Services Agreement, Torrid provided Hot Topic with certain information technology services for a fixed fee. The term of the Amended Reverse Services Agreement ended on October 25, 2025.

During the three-month period ended May 2, 2026, no amount was charged to Hot Topic for these services. During the three-month period ended May 3, 2025, we charged Hot Topic $0.1 million for these services, which was recorded as a reduction of selling, general and administrative expenses. As of the end of the first quarter of fiscal year 2026 and the end of fiscal year 2025, no amount was owed to us by Hot Topic for these services.

Hot Topic incurs certain direct expenses on our behalf, such as payments to our non-merchandise vendors and each month, we pay Hot Topic for these pass-through expenses. As of the end of the first quarter of fiscal year 2026, the net amount we owed Hot Topic for these expenses wasnot material. As of the end of fiscal year 2025, the net amount we owed Hot Topic for these expenses was $0.1 million, which is included in due to related parties in our condensed consolidated balance sheet.

Sponsor Advisory Services Agreement

On May 1, 2015, we entered into an advisory services agreement with Sycamore, pursuant to which Sycamore agreed to provide strategic planning and other related services to us. We are obligated to reimburse Sycamore for its expenses incurred in connection with providing such advisory services to us. As of the end of the first quarter of fiscal year 2026 and the end of fiscal year 2025, there wereno amounts due, and during the three-month periods ended May 2, 2026 and May 3, 2025, no amounts were paid under this agreement.

From time to time, we reimburse Sycamore for certain management expenses it pays on our behalf. During the three-month periods ended May 2, 2026 and May 3, 2025, the amounts paid to Sycamore for these expenses werenot material. As of the end of the first quarter of fiscal year 2026 and the end of fiscal year 2025, there wasno amount due.

Other Related Party Transactions

MGF Sourcing US, LLC, an entity indirectly controlled by affiliates of Sycamore, is one of our suppliers. During the three-month periods ended May 2, 2026 and May 3, 2025, cost of goods sold included $6.7 million and $8.0 million, respectively, related to the sale of merchandise purchased from this supplier. As of the end of the first quarter of fiscal year 2026 and the end of fiscal year 2025, the net amounts we owed MGF Sourcing US, LLC for these purchases were $5.4 million and $5.6 million, respectively. This liability is included in due to related parties in our condensed consolidated balance sheets.

HU Merchandising, LLC, a subsidiary of Hot Topic, is one of our suppliers. During the three-month period ended May 2, 2026, there wereno sales of merchandise purchased from this supplier, and during the three-month period ended May 3, 2025, cost of goods sold related to the sale of merchandise purchased from this supplier wasnot material. As of the end of the first quarter of fiscal year 2026 and the end of fiscal year 2025, there wasno amount due to HU Merchandising, LLC.

Note 6. Debt

Our debt consists of the following (in thousands):

(A)Outstanding borrowings under the ABL Facility are classified as current in the condensed consolidated balance sheets based on our intent and ability to repay each respective borrowing within 12 months of the related balance sheet dates.

Senior Secured Asset-Based Revolving Credit Facility, as amended (“ABL Facility”)

As of May 2, 2026 and January 31, 2026, the applicable per annum interest rate for borrowings under the ABL Facility was approximately 7%.

As of May 2, 2026, the maximum restricted payment utilizing the ABL Facility that our subsidiaries could make from its net assets was $103.3 million.

As of May 2, 2026, availability under the ABL Facility was $77.2 million, which reflects borrowings of $32.8 million, net of standby letters of credit issued and outstanding of $11.5 million.

During each of the three-month periods ended May 2, 2026 and May 3, 2025, amortization of financing costs for the ABL Facility wasnot material. During the three-month periods ended May 2, 2026 and May 3, 2025, interest expense was $0.9 million and $0.2 million, respectively.

As of May 2, 2026, we did not trigger a covenant compliance event and were compliant with our covenants under the ABL Facility.

Amended Term Loan Credit Agreement, as amended (“Amended Term Loan Credit Agreement”)

As of May 2, 2026 and January 31, 2026, the elected interest rate was approximately 9%.

During the three-month periods ended May 2, 2026 and May 3, 2025, we recognized $6.5 million and $7.5 million, respectively, of interest expense related to the Amended Term Loan Credit Agreement. During each of the three-month periods ended May 2, 2026 and May 3, 2025, amortization of original issue discount and financing costs related to the Amended Term Loan Credit Agreement was $0.3 million.

As of May 2, 2026, we were compliant with our covenants under the Amended Term Loan Credit Agreement.

Note 7. Leases

Our lease costs consist of the following (in thousands):

Note 8. Income Taxes

Effective Tax Rate

During the three-month periods ended May 2, 2026 and May 3, 2025, the provision for income taxes was $0.5 million and $2.6 million, respectively. The effective tax rates for the three-month periods ended May 2, 2026 and May 3, 2025 were 52.5% and 30.7%, respectively. The increase in the effective tax rate for the three-month period ended May 2, 2026 as compared to the three-month period ended May 3, 2025 was primarily due to a decrease in the amount of non-deductible compensation for covered employees relative to income before income taxes for the three months ended May 2, 2026.

Note 9. Commitments and Contingencies

U.S. Tariff Matter

On February 20, 2026, the U.S. Supreme Court issued a ruling that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) on goods imported into the United States were unauthorized. Following that ruling, the U.S. Court of International Trade (“CIT”) issued an order directing the U.S. Customs and Border Protection (“CBP”) to process refunds of the IEEPA tariffs, although the CIT immediately suspended the order while CBP developed and implemented the refund process. The IEEPA tariffs and related refund framework remain subject to ongoing litigation, including potential appeals, as well as regulatory and administrative developments. Accordingly, the ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and we have accounted for any potential recovery of IEEPA tariffs as a gain contingency. As of the end of the first quarter of fiscal year 2026, we did not recognize a receivable related to potential refunds of IEEPA tariffs as these refunds were not realized or realizable. On April 20, 2026, we submitted a refund application seeking the first phase of reimbursement of certain previously paid IEEPA tariff amounts totaling approximately $11.4 million. Refer to “Note 13—Subsequent Events” for further information regarding receipt of IEEPA tariff refunds.

Litigation

In October 2024, we were notified by a third-party vendor that it had observed a potentially unauthorized access to our data stored in a data warehouse. We have been named as a defendant insix pending class action lawsuits alleging that we failed to employ adequate security measures to protect the data stored in the data warehouse. On February 25, 2025, the United States District Court of the Central District of California granted a motion to consolidate thesix lawsuits, and plaintiffs filed a single consolidated class action complaint on April 28, 2025. We intend to vigorously defend ourselves in this matter. We are currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.

In February 2025, a class action complaint was filed in the Superior Court of the State of California captioned Leslie Cruz v. Torrid LLC. The complaint alleges terms on our website violate California’s Yelp Law which makes it unlawful for contracts or proposed contracts for goods or services to include provisions waiving a consumer’s right to make statements concerning the goods or services and threatening to enforce such provisions. In May 2025, the complaint was amended to also allege misleading and unlawful pricing, sales and discounting practices on our website under multiple legal theories including violation of California’s Unfair Competition Law, California False Advertising Law, California Legal Remedies Act, and Federal Trade Commission Act. We intend to vigorously defend ourselves against the complaint. We are currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.

From time to time, we are involved in other matters of litigation that arise in the ordinary course of business. Though significant litigation or awards against us could seriously harm our business and financial results, we do not at this time expect these other matters of litigation to have a material adverse effect on our condensed consolidated financial statements.

Indemnities, Commitments and Guarantees

During the ordinary course of business, we have made certain other indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions. These indemnities include those given to various lessors in connection with facility leases for certain claims arising from such facility or lease and indemnities to our Board of Directors and officers to the maximum extent permitted. Commitments include those given to various merchandise vendors and suppliers. From time to time, we have issued guarantees in the form of standby letters of credit as security for workers’ compensation claims. The durations of these indemnities, commitments and guarantees vary. Some of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. We have not recorded any liability for these indemnities, commitments and guarantees in the accompanying condensed consolidated financial statements as no demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our condensed consolidated financial statements.

Note 10. Earnings Per Share

The following table provides the computation of basic and diluted net earnings per share (in thousands, except per share amounts):

The following table presents potentially dilutive securities excluded from the computation of diluted earnings per share for the periods presented because their effect would have been anti-dilutive (in thousands):

Note 11. Fair Value Measurements

Financial assets and liabilities measured at fair value on a recurring basis consisted of the following (in thousands):

The deferred compensation plan liability represents the amount that would be earned by participants if the funds were invested in securities traded in active markets. The fair value of the deferred compensation plan liability is determined based on quoted prices of similar assets that are traded in observable markets, or represents the cash withheld by participants prior to any investment activity.

The book value of cash, certain of our other current assets, accounts payable, and certain of our accrued expenses and other current liabilities approximate fair value because of the short maturity and high liquidity of these instruments.

As of May 2, 2026 and January 31, 2026, the fair value of the Amended Term Loan Credit Agreement was approximately $115.3 million and $117.1 million, respectively. The fair value of the Amended Term Loan Credit Agreement is determined using current applicable rates for similar instruments as of each balance sheet date, a Level 2 measurement.

The book value of the ABL Facility approximates fair value because of the variable interest rate of this facility, a Level 2 measurement.

Note 12. Segment Reporting

We have determined that we haveone reportable segment, which includes the operation of our e-Commerce platform and stores. The single segment was identified based on how the Chief Operating Decision Maker (“CODM”), who we have determined to be our Chief Executive Officer, manages and evaluates performance and allocates resources based on consolidated net income. As the CODM is not provided any asset information, we do not disclose the measure of segment assets. Net sales related to our operations in Canada and Puerto Rico during the three-month periods ended May 2, 2026 and May 3, 2025 werenot material and, therefore, are not reported separately from domestic net sales. Long-lived assets in Canada and Puerto Rico as of May 2, 2026 and January 31, 2026 are not reported separately from domestic long-lived assets as they werenot material.

The following table presents information regularly provided to the CODM about our reportable segment (in thousands):

(A)Cost of goods sold as provided to the CODM excludes depreciation and amortization and share-based compensation, which are presented separately.

(B)Selling, general and administrative expenses as provided to the CODM exclude depreciation and amortization, share-based compensation and other expenses, which are presented separately.

(C)Depreciation and amortization excludes amortization of debt issuance costs and original issue discount that are reflected in interest expense.

(D)Other expenses include severance costs for certain key management positions, certain transaction and litigation fees, 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.

Note 13. Subsequent Events

As described in “Note 9—Commitments and Contingencies,” on April 20, 2026, we submitted a refund application seeking reimbursement of certain previously paid tariff amounts imposed under the IEEPA. In May 2026, we received refunds of a portion of these previously paid tariffs and associated interest totaling approximately $0.8 million, substantially all of which was recorded as a reduction of cost of goods sold upon receipt.