Financial Survey: Torrid (NYSE:CURV) & Caleres (NYSE:CAL)

Caleres (NYSE:CAL) and Torrid (NYSE:CURV) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Risk and Volatility

Caleres has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Torrid has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Caleres and Torrid, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caleres	0	3	0	0	2.00
Torrid	2	5	1	0	1.88

Torrid has a consensus price target of $1.81, suggesting a potential downside of 16.86%. Given Torrid’s higher possible upside, analysts plainly believe Torrid is more favorable than Caleres.

Valuation and Earnings

This table compares Caleres and Torrid”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caleres	$2.85 billion	0.15	-$6.69 million	$1.50	8.23
Torrid	$948.85 million	0.23	-$7.03 million	($0.09)	-24.22

Caleres has higher revenue and earnings than Torrid. Torrid is trading at a lower price-to-earnings ratio than Caleres, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

98.4% of Caleres shares are held by institutional investors. Comparatively, 81.8% of Torrid shares are held by institutional investors. 3.1% of Caleres shares are held by insiders. Comparatively, 6.5% of Torrid shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Caleres and Torrid’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caleres	1.85%	7.84%	2.42%
Torrid	-0.94%	N/A	-4.49%

Summary

Caleres beats Torrid on 9 of the 14 factors compared between the two stocks.

About Caleres

Caleres, Inc. engages in the retail and wholesale of footwear business in the United States, Canada, East Asia, and internationally. It operates through Famous Footwear and Brand Portfolio segments. The company offers licensed, branded, and private-label athletic, casual, and dress footwear products. The company provides brand name athletic, casual, and dress shoes, including Nike, Skechers, adidas, Vans, Crocs, Converse, Puma, Birkenstock, New Balance, Under Armour, Dr. Martens, Asics, Timberland, Bearpaw, Skechers, HeyDude, Franco Sarto, Rykä, Vince, Bzees, Veronica Beard, and Zodiac brands, as well as company-owned and licensed brands, such as LifeStride, Dr. Scholl’s Shoes, Blowfish Malibu, and Naturalizer. The company also operates naturalizer.com, naturalizer.ca, vionicshoes.com, samedelman.com, samedelman.co.uk, allenedmonds.com, allenedmonds.ca, drschollsshoes.com, lifestride.com, francosarto.com, ryka.com, bzees.com, and zodiacshoes.com, as well as Vince.com, blowfishshoes.com, and veronicabeard.com websites. In addition, it designs, sources, manufactures, and markets footwear to retail stores, such as online retailers, national chains, department stores, mass merchandisers, and independent retailers. Further, the company wholesales men’s footwear, apparel, leather goods, and accessories under the Allen Edmonds brand; footwear for women under LifeStride brand; Italian footwear Franco Sarto brand; athletic footwear for women under the Rykä brand; women’s shoe collection under the Vince brand; women’s footwear under the Bzees brand; and women’s footwear collection under Veronica Beard brand. The company was formerly known as Brown Shoe Company, Inc. and changed its name to Caleres, Inc. in May 2015. Caleres, Inc. was founded in 1878 and is headquartered in Saint Louis, Missouri.

About Torrid

Torrid Holdings Inc. operates in women’s plus-size apparel and intimates market in North America. The company designs, develops, and merchandises its products under the Torrid, Torrid Curve, CURV, and Lovesick brand names. It is involved in the sale of tops, bottoms, dresses, denims, activewear, intimates, sleep wear, swim wear, and outerwear products; and non-apparel products comprising accessories, footwear, and beauty products. The company sells its products directly to consumers through its e-commerce platform and its physical stores. Torrid Holdings Inc. was incorporated in 2019 and is headquartered in City Of Industry, California.