What Happened?
A number of stocks fell in the afternoon session after the resurgence in U.S.-Iran tensions sent oil prices sharply higher and reignited concerns about both the consumer's discretionary wallet and the cost of a globally sourced supply chain.
Apparel companies face an ocean-freight cost problem. With shipping lanes rerouting around the Middle East and tariff pressures still working through cost structures, landed costs for the spring and summer seasons were heading higher just as retailers' ability to raise shelf prices weakened.
The setup threatened both gross margins and full-price sell-through at a time when inventory discipline had only recently improved.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Apparel Retailer company Torrid (NYSE: CURV) fell 6.8%. Is now the time to buy Torrid? Access our full analysis report here, it’s free.
- Apparel Retailer company Zumiez (NASDAQ: ZUMZ) fell 4.8%. Is now the time to buy Zumiez? Access our full analysis report here, it’s free.
- Apparel Retailer company Gap (NYSE: GAP) fell 2.9%. Is now the time to buy Gap? Access our full analysis report here, it’s free.
Zooming In On Torrid (CURV)
Torrid’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 17 days ago when the stock gained 4.4% on the news that the reopening of the Strait of Hormuz reduced the threat of a global energy crisis.
For the retail sector, lower oil prices significantly decrease the cost of transporting goods from warehouses to storefronts, directly boosting net margins. Investors are also betting that the extra cash in consumers' pockets will lead to increased spending on non-essential goods, such as apparel and home electronics.
Additionally, the de-escalation of conflict stabilizes global supply chains, easing the "uncertainty discount" that has weighed on inventory management. As shipping routes through the Middle East normalize, retailers can expect more predictable lead times for international imports. This geopolitical breather allows the sector to pivot from defensive cost-cutting back to growth-oriented promotions and expansion strategies.
Torrid is up 48.6% since the beginning of the year, but at $1.58 per share, it is still trading 72.9% below its 52-week high of $5.82 from May 2025. Investors who bought $1,000 worth of Torrid’s shares at the IPO in June 2021 would now be looking at an investment worth $65.22.
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