Good afternoon, everyone, and thank you for joining Torrid's call today to discuss our financial results for the second quarter of fiscal 2023, which we released this afternoon, and can be found on our website at investors.torrid.com. With me today on the call are Lisa Harper, Chief Executive Officer of Torrid; Mark Mizicko, Chief Commercial Officer; and Paula Dempsey, our Interim Chief Financial Officer. 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 in terms of similar meaning. All forward-looking statements are based on current expectations and assumptions as of today, September 6, 2023. 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.

Thanks, Chinwe. Good afternoon, and thank you for joining us to discuss our second quarter results. Before I begin, I would like to acknowledge and thank the Torrid team for their hard work and dedication as we navigate many important initiatives. I will begin by discussing our second quarter performance, providing details on the progress we have made, as well as our focus going forward. I will then turn the call over to Mark Mizicko to discuss our merchandising and marketing strategies. Paula will then review our financials in more detail and provide our outlook for the remainder of the year. Our second quarter results reflect the impact of continued choppy customer behavior. They are more selective in their purchases and exhibit inconsistent traffic trends. In addition, we have identified missed opportunities in our casual product assortment that we are addressing immediately. With that, we generated sales of $289 million and adjusted EBITDA of $32 million for the quarter, in line with our guidance. From an inventory perspective, we are pleased with the progress we've made. We've ended the quarter with inventory down 13% compared to a year ago. We saw the largest decline in our intimates merchandise and are in good standing with our current levels. During the quarter, our customers responded well to newness in our assortment. We saw strength in new fabrications and leg shapes, and we plan to expand these going forward. As mentioned, our casual business was softer than we expected, and in hindsight, we realized that we did not offer enough variety, versatility, and innovation. Our customer file metrics have been consistent and stable over the last 12 months. Our VIP customer retention rate continues to demonstrate strength, standing at an impressive 97%. We are seeing an increase in margin rates among key customer groups, such as loyalists, VIPs, and new web buyers. Lastly, we are seeing a return to acquiring 60% of our customers in store, which is approaching pre-COVID levels. Overall, our strategies will continue to emphasize customer file growth via enhanced marketing investments, additional store openings, value rationalization, and improved product offering. As we look ahead, we're focused on positioning the business to generate consistent growth over the long term. As always, we maintain a data-driven approach to ensure high-quality design, merchandise, and inventory. In addition to delivering great merchandise that fills every need in her closet and ensuring a flawless fit, our focus is directed towards three pivotal priorities. These priorities encompass: number one, broadening our pricing strategy to rationalize the value of our product offering; number two, enhancing our marketing investments; and number three, optimizing our cost structure and inventory. The first priority is to broaden our pricing strategy and place a greater emphasis on value. We recognize the importance of value and competitive opening price points, especially in this environment. In a highly competitive marketplace, she is increasingly looking for high-quality products that provide the best value for money. We have not had the ideal balance in value pricing, which we now see as having a negative impact on both customer acquisition and retention. Our initial retail prices have risen too much in the last few years, and we are implementing a comprehensive strategy that balances both value and price, which will be fully integrated into our spring lines with a good, better, and best assortment and pricing strategy. Number two, turning to marketing, our second priority. We consistently strive to innovate our investments and engage in testing across diverse channels, all with the objective of driving both immediate as well as lifetime productivity. In the past several years, very little of our marketing efforts have been devoted to driving traffic to our stores. We have had a marketing bias toward e-commerce. While we are becoming more productive in our digital investments, we are also rebalancing our overall marketing strategies to enhance the customer's omni journey. This journey is channel agnostic in terms of service, but with a preference for store traffic, which provides a substantially higher lifetime return. In the second quarter, our traditional digital investments were instrumental in delivering positive results during the 4th of July sales and the July Torrid Cash event. Moving forward, we will continue to drive the evolution of our marketing strategy, focusing on customer acquisition, frequency, retention, as well as maximizing lifetime value. Our third priority is to optimize our cost structure and inventory. After a comprehensive review of our operating structure, we have identified key areas to optimize: workforce realignment, product cost improvement, and inventory management. As part of our workforce realignment, we made the difficult decision at the beginning of the third quarter to eliminate several positions resulting in a reduction of 5% in our headquarters staff. By executing these essential cost-saving initiatives, our organization is effectively poised to reshape our business operations, fostering a more cohesive and streamlined approach that will position us for future growth. We are also conducting an in-depth analysis of our product costs. I recently completed a highly productive vendor trip to Asia, in which we had the privilege of personally engaging with our top suppliers. The primary objective of the trip was to strengthen our relationships and emphasize the significance of maintaining a competitive pricing and sourcing strategy. Based on this vendor alignment, we believe there is significant opportunity to improve our product margins over the next two years. Our speed model helps us pre-position fabrics with third-party factory partners, enabling us to accelerate product replenishment cycles, improve inventory turnover, and drive higher market share gains. We rely on our read-and-react testing approach, which over time has helped us navigate inventory risk. As in the past, we believe that our data-driven approach will continue to drive market growth. The next step is to enhance our inventory management by expanding our ship-from-store program and testing clearance stores. As of August, we have successfully rolled out our ship-from-store initiative to an additional 200 stores, bringing the total of participating stores to approximately 600 locations. The program's outcomes have been positive, generating incremental sales, and enabling us to optimize inventory from our stores. In addition, in the third quarter, we will be testing the concept of clearance stores. We believe clearance stores could unlock an effective strategy for accelerating the flow of discounted products, enhancing our profit margins, and attracting the attention of new customers. Should the clearance store test yield favorable results, we will expand our network by converting underperforming stores. We are also implementing additional measures to enhance labor productivity across our retail stores as well as our distribution center. We expect these strategic initiatives to generate substantial savings on an annualized basis over the next two years. In a rapidly changing retail environment, we are focused on exercising control over the aspects within our control. We believe that by streamlining our organization, enhancing our pricing strategy with value and improving our inventory management, we are making the right investments to position the business for long-term growth. Our unwavering commitment remains achieving optimal results through our products, customer excellence, and fit, while maintaining a keen awareness of the ever-changing landscape. And with that, I'll pass the call to Mark Mizicko, our Chief Commercial Officer.

Thanks, Lisa. I'd like to start today by giving some updates on a few of the initiatives that our teams have been working on, and then I'll briefly discuss some of the highlights of the second quarter. As I discussed last time, our merchandising and planning teams are focused on driving gross margin expansion through better balancing our assortment to customer demand, improving product sell through, and improving the efficiency with which we price and promote our products by channel and location. We have made progress in our pre-season assortment planning process. And with each successive buy, we have added guardrails that allow for data-driven assessment of the risks and opportunities in the business. We are finding meaningful opportunities in categories, fits, and fabrications that we have not invested in sufficiently, despite substantial customer demand. We have also made improvements in our channel planning, and expect to see that tailoring our investments better to demand by channel will drive margin expansion in the coming deliveries. For the second quarter, we saw some modest improvements in our product margin rates, as we have increased our average retail through a better mix of right price selling by getting cleaner in our clearance inventory levels. We expect this margin expansion to continue in the fall season. We have improved our methodology for pricing by channel by initiating pricing levels that target product sell throughs by an outlet. In August, we rolled out our ship-from-store capability to the remaining 200 U.S. stores and are seeing incremental sales and accretive EBITDA from these efforts, which also help us to move through more regular price inventory. In marketing, we have begun to see some more successful promotional events. Our Torrid Cash Redemption in July was a success, and we are seeing some modest improvement in this event, as we have tweaked the timing, cadence, and the supporting marketing efforts. Our future marketing events will continue to evolve as we focus our message on the product that is hot at the time that our customer is looking for it. Our efforts to drive customer loyalty and engagement continue through store events, improvements in our online shopping experience, and more synchronized messaging across our shopping channels. We also launched a new data platform with our digital marketing agency in August, and the early learning shows that we have the potential to optimize the amount and allocation of our digital spend, which we will be testing over the coming months. While I'm not pleased with our overall results in the quarter, I am pleased with the progress our teams have made in putting fundamental changes into place that will help us avoid some of the missteps that have been a drag on our performance. I am also very excited to announce that Kate Horton has rejoined the Torrid team as Chief Merchandising Officer. Kate is a strong leader, a talented merchant, and brings a great understanding of our customer and a passion for the Torrid brand. Turning to a few second quarter highlights. We continued to see success in workwear this quarter. However, it was not enough to offset the softness in the casual part of our assortment. Addressing the opportunity in our casual assortment is a key focus for our design and merchandising teams and working to maximize the part of the casual business that has the versatility to be dressed up or dressed down, as these hardworking styles are seen as a value to our customers. In apparel, we had success in our 2 for $30 tops business, as our customer has responded to value. We will be increasing our offerings in the opening price point portion of our business through the fall and into spring. Washable gauze, lightweight denim, and edgy casual looks were fashion highlights, as were bottoms in boot, flare, and wide leg. The wider leg opening in bottoms has been a success for us, but we did not capitalize sufficiently on this trend this past quarter. But we will have increased penetration through the fall season. By category, non-denim bottoms and leggings were strong, as were dresses and jackets. As was the case in the first quarter, we saw much of the miss in our apparel business coming from under-investments in key fabrics, fits, and in prints, all of which have a consistent history. As we progress through the fall, we've made further improvements to the way we utilize our historical selling data, and we should see improvement with each successive buy cycle in the way that we balance the assortment across the attributes that are important to our customers. In the Curve business, we had strong regular price selling in actives, which continues to be driven by outdoor performance apparel and also in the lounge and swim apparel businesses. In our Curve Foundations business, we have opportunities next year to fine-tune our prints, optimize our assortment by channel, and to change the timing of fall color palette getting set in stores. In summary, I'm confident that the changes that have been made to our merchandising and planning process, the utilization of our selling and customer data, and the addition of Kate to the leadership team will result in improved assortments as we move through the fall and into next spring.

Thank you, Mark, and good afternoon everyone. I will start with a detailed discussion of our second quarter results, followed by an update on our outlook. In the second quarter, our customers continue to face headwinds related to the current environment; and in turn, we experience challenges with traffic. However, we have carefully managed our business through disciplined expense and inventory management and generated net sales and EBITDA that were in line with our expectations. We not only met our quarterly guidance, but also launched initiatives that speak to a long-term strategic vision, as previously highlighted by Lisa in her review of priorities. We view fiscal 2023 as a rebuild year for Torrid as it relates to product, value, and our organizational structure. We have taken cost control measures that will prove to be effective, yet balanced, ensuring further opportunities in the near future. Let's start by discussing our top-line performance. During the second quarter, net sales declined 18.2% to $289 million, compared to $354 million last year, and comparable sales in the quarter declined 17.9%. We experienced slowing customer traffic during the quarter as a broader retail environment struggled with consumers shifting their spending to essentials and experiences. As we moved through the quarter, we saw sequential improvements in our Torrid Cash event. Specifically, the daily average sales during our July Torrid Cash event outperformed that of April by 13%, a result we attribute primarily to the heightened sense of urgency we successfully integrate in the event. Our gross profit margin was 35.5%, compared to 37.2% in the second quarter of last year. The 170 basis points decline was primarily due to approximately 105 basis points deleverage in store occupancy, 70 basis points in a one-time benefit in private label credit card income last year, and deleverage of 45 basis points in merchandising payroll costs and other reserves. This was slightly offset by product margin improvement of 50 basis points, driven by thoughtful pricing decisions on the web and promotional category activity in stores. SG&A expenses in the quarter were $70 million, compared to $79 million for the second quarter in the prior year. The $9 million decrease in SG&A is primarily due to a $3.7 million decrease in store payroll costs, a $2.9 million reduction in performance bonuses, a $1.4 million decrease in property and equipment disposals, and a decline of $1 million in other store operating costs. As a percentage of sales, SG&A was 24.2% compared to 22.3% in the prior year, an increase of 1.9%. Marketing expenses in the quarter were $13 million compared to $14 million in the second quarter of last year. As a percentage of net sales, marketing increased 70 basis points to 4.5% compared to 3.8% in the second quarter of last year. The reduction in marketing expense is primarily due to lower spending on upper funnel activities such as TV advertising and regional marketing events. We remain focused on optimizing our marketing spend by channel, aiming to enhance returns on investment and foster growth in customer acquisition and retention. Turning to our bottom line performance, our net income for the quarter was $7 million or $0.06 per share versus net income of $23 million or $0.22 per share for the same period last year. In addition to GAAP measures, we believe that adjusted EBITDA is an important measure that we use to evaluate and manage our business. Adjusted EBITDA was $32 million or 11.1% of net sales compared to $52 million or 14.7% of net sales in the second quarter of 2022. Turning to the balance sheet, our cash and cash equivalents stood at $19 million at the end of the quarter. Total liquidity, including available credit, was $149 million. Total debt at the end of the quarter was $313 million compared to $335 million in the second quarter of 2022. Our net debt to adjusted EBITDA was 2.8x at quarter end. Inventory at the end of the quarter declined approximately 13% to $158 million compared to $181 million at the end of the second quarter of fiscal 2022. Given our projected sales for the rest of the fiscal year, we're comfortable with our current inventory levels. In Q2, we opened three Torrid stores while simultaneously closing two stores, ending the quarter with 639 stores. We still expect to open 30 to 40 stores for the remainder of the year. Turning to our outlook, we recognize consumers are facing external pressures to the current environment, and while we're encouraged to see our sales trends have stabilized, business has been anything but predictable this year. We believe it is appropriate to assume that the back half of the year will continue to be volatile. Our focus remains on driving top line results through our marketing investments and new product releases, while carefully managing our inventory and expenses. We have implemented a cost reduction initiative that is projected to yield some annual savings this year, while anticipating a more significant acceleration in reductions in the coming year, driven by improved cost as well as the annualization of SG&A reductions made in 2023. Given this backdrop, we are revising our outlook for the year and now expect sales to be between $1.080 billion and $1.115 billion and adjusted EBITDA to be between $90 million and $100 million, which includes the impact of the 53rd week. We anticipate net sales of the 53rd week to be between $14 million and $18 million; capital expenditures to be between $35 million and $40 million for fiscal 2023 reflecting technology investments and between 30 to 40 new store openings primarily in the fourth quarter. For the third quarter, we project net sales to range from $242 million to $251 million, and adjusted EBITDA to be between $11 million and $15 million. Despite the near-term pressures, we remain confident in the long-term potential of Torrid. We have a loyal and active customer base, which accounts for over 90% of our sales, who shopped with us on average four times a year. The changes we are making to the merchandising and marketing side of our business, combined with our disciplined approach to expense management, should position us to deliver solid top and bottom-line growth over time.

Thank you. The first question comes from Mark Altschwager with Baird. Please go ahead with your question.

Hi. This is Amy Teske on for Mark. So in regards to your pricing, in recent quarters, you have talked about refining your promotional strategy being part of your playbook. And strategic pricing was a gross margin benefit to this quarter. But you also noted plans to implement a deeper value strategy. So could you help us to reconcile those two comments, and what impact do you expect pricing to have in the coming quarters?

There are two different aspects of pricing that we are addressing. Previously, we discussed promotional pricing aimed at optimizing margins and product desirability by channel. This is ongoing, and we are seeing positive results that give us confidence to expand further. Today, I want to focus on a different aspect of our business that complements our promotional strategies. Over the last few years, our retail prices have significantly increased. I have worked closely with our core vendors to gain insights from mills and fabric investments, the cost of goods, CMT, and opportunities related to the country of origin. This understanding has helped us develop strategies for pricing and sourcing that benefit our cost of goods while allowing for a variable retail pricing strategy. For instance, our 2 for $30 program has performed well, and we have appropriately managed inventory, giving our key items a stronger presence in stores. As we approach spring, we will introduce core programs in dresses, tops, and shorts with a good, better, best pricing strategy. Our average ticket prices have risen by about $10 across all categories, and we recognize that some customers may feel sticker shock. However, we will maintain fashion in our products while increasing the variety of entry price points. This approach combines our sourcing strategy and cost of goods strategy, along with assortment strategies to offer customers a more varied pricing structure. The response to our current strategies has been very positive, and we anticipate that these efforts will contribute to incremental business in the future, especially as we roll out more comprehensive programs for the spring season. It's essential to understand that promotions and pricing serve different purposes, and initial pricing is a distinct consideration.

So, you did talk about the product costing opportunity. So how should we think about the net effect of the product costing opportunity versus the need for sharper price points? To what extent are you going to be reinvesting the savings?

I believe the improvements in product costing will enhance our cost of goods sold, benefiting our bottom line as we progress. From a pricing standpoint, we see this as a chance to increase average order value and add more units to our offerings. This creates multiple benefits, particularly by encouraging customers to purchase essentials from us more frequently, which is something we believe they should be doing. Expanding that part of our assortment is key. Additionally, lower costs of goods sold will positively impact all our inventory.

And the next question comes from the line of Alice Xiao with Bank of America.

Can you please give more detail on the cadence of sales trends throughout the quarter by month? I know you touched a bit upon the Torrid Cash program component, but just the total sales trends. And then also what you're seeing quarter to date, please?

The trends of the quarter were choppy and the first and third months were softer than the middle. So, that we are still managing what we'd refer to as that choppy customer behavior. I think we have more confidence in terms of near-term results and in terms of the early third quarter results. And what we're seeing is our ability to be more predictive and consistent in terms of delivering on our forecasting. And so I think that we've, as an organization, been able to absorb the behavior of the customer and work it into our forecasting more effectively. We're starting to see trends in terms of merch margin or product margin improvement that are more and more consistent. We're seeing nice response to early fall products. So we're happy about that. So, I want to be clear, it's a challenging kind of transformation for us at the organization, but we are very optimistic by what we're seeing with the customer with some level of predictability. And we're managing all of these aspects of the business to drive to an inflection point. And so what we're seeing right now is better results in terms of product margin and more predictability in terms of our performance as we're forecasting it. So, that makes us feel more confident as we're moving forward.

And then I wanted to ask about the clearance stores that you're testing next or this quarter. What criteria are you considering for current stores to underperform enough to become a clearance store? And also, can you elaborate a little bit on the impact to margins you expect from this testing and also just incorporating more clearance stores into your portfolio? Thanks.

The centers we have selected so far are in outlet locations where customers generally expect to find a higher availability of clearance products. We considered several factors, with one crucial aspect being the stores that could serve as feeder stores, which we anticipate will provide some margin benefits. We will be opening these stores in a few days, but it's a bit early to discuss the margin expectations since none have opened yet. We have models in place, and while they may not be perfectly accurate, they should provide a general direction. However, we are not ready to discuss the margin benefits until we have them established.

I believe the idea is that by using feeder stores to support a specific clearance store, we have tested increasing the number of fashion SKUs in those stores, replacing the space that was originally allocated to higher levels of clearance. We have observed positive movement regarding the introduction of more fashion into those stores. These are the feeder stores. In the coming week, we will be testing three sale-open stores, and we will provide updates during the next quarterly call about their performance, the margin implications, and if successful, how we would accelerate this strategy while making decisions about the specific stores and feeder stores involved.

And the next question comes from the line of Brooke Roach with Goldman Sachs.

I was hoping you could quantify the cost savings that you've identified across the various initiatives you've discussed today. And what proportion of those cost savings are realizable in 2023 versus 2024? How are you thinking about the opportunity to drop those cost savings to the bottom line versus reinvestment in the business? Thank you.

If we consider the SG&A cost savings for this year, it amounts to a couple of million dollars on an annualized basis, approximately $4.5 million. However, the larger opportunity lies in managing the cost of goods and inventory management, such as shifting from ship-from-store to clearance sources. This will help us adjust our inventory investments over time. We continually analyze these areas, and we are confident in our organizational investments that support our initiatives and growth in the business. We will keep monitoring this situation, but currently, we see our greatest opportunity in improving COGS and inventory investments.

And the next question comes from the line of Alex Straton with Morgan Stanley.

Hi. This is Helen Qiao on for Alex. I know you spoke to accelerating traffic trends throughout the quarter. And that kind of differs from what we have heard from other reporters this earning season. And I was wondering, how much are you attributing that to the macro environment versus how much are you attributing to maybe company-specific execution?

Actually, we saw variable traffic trends in the quarter. So actually, the best traffic trends were in June, and the other months were softer. So, it did improve as we went through the back end of the quarter. I missed the rest of your question. Was there more?

I was just wondering, like, how much you attribute kind of performance to more macro conditions versus more like company-specific execution.

Okay. And that's a very hard, I think, distinction to make. We do think there is, as everyone has discussed some level of macro pressure that is not something that we can manage, I mean effectively internally, meaning it's an outside influence. What we do focus on is what we can manage internally. And so some of the things that we have talked about enhancing our casual presentation about pricing, value pricing, opening price point, cost of goods improvement are the things we are really focusing on as an organization and think that we have a runway there to really drive some true value in the business.

Yes, this is Paula Dempsey. We noticed an improvement in credit card delinquency this quarter compared to the previous quarter. However, when we compare it to the same period last year, we have seen an increase, similar to the rest of the industry. That said, we are not overly concerned about it in our business at this time. I hope that answers your question.

There are no further questions at this time. And I would like to turn the floor back over to Lisa Harper for any closing comments.

Thanks for joining us today. We look forward to sharing our progress as we move through the balance of the year and look forward to talking to you after the third quarter. Thanks for joining us.

And ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.