Financial Analysis

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. On April 20, 2026, the CBP launched the Consolidated Administration and Processing of Entries (CAPE) portal through which importers of record may submit IEEPA tariff refund claims. 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 previously paid IEEPA tariffs as a gain contingency. On April 20, 2026, we submitted a refund application through the CAPE portal seeking the first phase of reimbursement of certain previously paid IEEPA tariff amounts totaling approximately $11.3 million. During the three- and six-month periods ended August 1, 2026, we received refunds of a portion of these previously paid tariffs totaling approximately $11.1 million, which was recorded as a reduction of cost of goods sold, and associated interest totaling approximately $0.3 m …

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Note 6. Debt Our debt consists of the following (in thousands): August 1, 2026 January 31, 2026 ABL Facility (as defined below), due earlier of (i) August 1, 2030 and (ii) the date that is 91 days prior to the maturity of any material indebtedness $ 39,690 $ 31,020 Borrowings under credit facility (A) $ 39,690 $ 31,020 Amended Term Loan Credit Agreement (as defined below), due June 14, 2028 $ 266,875 $ 275,625 Less: unamortized original issue discount and debt financing costs (2,539) (3,217) 264,336 272,408 Less: current portion of term loan (16,144) (16,144) Noncurrent debt, net $ 248,192 $ 256,264 (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 August 1, 2026 and January 31, 2026, the applicable per annum interest rate for borrowings under the ABL Facility was approximately 7%. As of August 1, 2026, the maximum restricted payment utilizing the ABL Facility that our subsidiaries could make from its net assets was $88.6 million. As of August 1, 2026, availability under the ABL Facility was $52.4 million, which reflects borrowings of $39.7 million, net of standby letters of credit issued and outstanding of $12.1 million. During each of the three-month periods ended August 1, 2026 and August 2, 2025, amo …

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Our revenue, disaggregated by product category, consists of the following (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Apparel $ 212,729 $ 241,411 $ 440,514 $ 481,198 Non-apparel 9,665 13,457 19,214 31,710 Other 9,333 7,938 17,799 15,863 Total net sales $ 231,727 $ 262,806 $ 477,527 $ 528,771

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Note 11. Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring basis consisted of the following (in thousands): August 1, 2026 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (cash equivalent) $ 126 $ 126 $ $ Total assets $ 126 $ 126 $ $ Liabilities: Unvested restricted cash units liability (current) $ 1,579 $ 1,579 $ $ Deferred compensation plan liability (current) 156 156 Deferred compensation plan liability (noncurrent) 4,137 4,137 Total liabilities $ 5,872 $ 1,579 $ 4,293 $ January 31, 2026 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Money market funds (cash equivalent) $ 124 $ 124 $ $ Total assets $ 124 $ 124 $ $ Liabilities: Unvested restricted cash units liability (current) $ 631 $ 631 $ $ Deferred compensation plan liability (current) 153 153 Deferred compensation plan liability (noncurrent) 4,039 4,039 Total liabilities $ 4,823 $ 631 $ 4,192 $ 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 …

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Note 8. Income Taxes Effective Tax Rate During the three- and six-month periods ended August 1, 2026, the provision for income taxes was $1.4 million and $1.8 million, respectively. During the three- and six-month periods ended August 2, 2025, the provision for income taxes was $0.5 million and $3.1 million, respectively. The effective tax rates for the three- and six-month periods ended August 1, 2026 were 21.0% and 24.7%, respectively. The effective tax rates for the three- and six-month periods ended August 2, 2025 were 23.7% and 29.4%, respectively. The decrease in the effective tax rate for the three-month period ended August 1, 2026 as compared to the three-month period ended August 2, 2025 was primarily due to the discrete recognition of refunds of previously paid IEEPA tariffs (as described in Note 9Commitments and Contingencies), partially offset by a decrease in the amount of non-deductible compensation for covered employees relative to income before income taxes for the three-month period ended August 1, 2026. The decrease in the effective tax rate for the six-month period ended August 1, 2026 as compared to the six-month period ended August 2, 2025 was primarily due to the discrete recognition of refunds of previously paid IEEPA tariffs for the six-month period ended August 1, 2026. …

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Note 7. Leases Our lease costs consist of the following (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Fixed operating lease cost $ 9,081 $ 11,956 $ 18,690 $ 24,374 Short-term lease cost 19 21 47 43 Variable lease cost 4,938 5,613 9,886 11,278 Total lease cost $ 14,038 $ 17,590 $ 28,623 $ 35,695

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Recently Adopted Accounting Standards We did not adopt any new accounting standards during the three- and six-month periods ended August 1, 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 Goodw …

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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- and six-month periods ended August 1, 2026 and August 2, 2025, Hot Topic charged us $0.5 million and $1.0 million, respectively, 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 second quarter of fiscal year 2026 and the end of fiscal year 2025, we owed $0.2 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 …

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Note 4. Revenue Recognition Our revenue, disaggregated by product category, consists of the following (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Apparel $ 212,729 $ 241,411 $ 440,514 $ 481,198 Non-apparel 9,665 13,457 19,214 31,710 Other 9,333 7,938 17,799 15,863 Total net sales $ 231,727 $ 262,806 $ 477,527 $ 528,771 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): August 1, 2026 January 31, 2026 Accrued loyalty program (1) $ 9,707 $ 9,425 Gift cards (1) $ 11,712 $ 13,695 Deferred revenue (2) $ 1,998 $ 2,683 Deferred PLCC Funds (3) $ 2,708 $ 2,958 (1) Amounts are included within accrued and other current liabilities in the condensed consolidated balance sheets . (2) Amount as of August 1, 2026 consists of $1.9 million within accrued and other current liabilities and …

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Note 12. Segment Reporting We have determined that we have one 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- and six-month periods ended August 1, 2026 and August 2, 2025 were not material and, therefore, are not reported separately from domestic net sales. Long-lived assets in Canada and Puerto Rico as of August 1, 2026 and January 31, 2026 are not reported separately from domestic long-lived assets as they were not material. The following table presents information regularly provided to the CODM about our reportable segment (in thousands): Three Months Ended Six Months Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Net sales $ 231,727 $ 262,806 $ 477,527 $ 528,771 Less: Cost of goods sold (A) 137,190 160,125 290,067 315,771 Selling, general and administrative expenses (B) 57,802 68,362 118,588 136,246 Depreciation and amortization (C) 5,037 9,430 11,380 18,824 Share-based compensation 2,302 1,371 4,321 2,840 Marketing expenses 13,326 12,817 27,868 28,176 Interest expense 7,841 8,119 15,560 16,280 Prov …

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Note 13. Subsequent Events Hot Topic Sale On September 2, 2026, Spencer Spirit Holdings, Inc. completed its acquisition of Hot Topic and its portfolio of brands from Sycamore, pursuant to a definitive agreement entered into on August 6, 2026 (the Sale). Upon closing of the Sale, Hot Topic ceased to be controlled by Sycamore and, accordingly, ceased to be a related party of Torrid. Our existing Amended and Restated Services Agreement with Hot Topic described in Note 5Related Party Transactions remains in place following the Sale, and we do not believe the Sale will have a material impact on, or cause any material disruption to, our business, financial condition, results of operations, or cash flows. The Sale did not result in any recognized adjustment to the amounts reported in these condensed consolidated financial statements as of and for the three- and six-month periods ended August 1, 2026. We will continue to evaluate whether any transactions with Hot Topic occurring after the Sale may materially impact us. …

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