Analysis Rating: Filtered By: VSCO (2) × Analyst's Rating History on VSCO g Sel 40 36 20 Jul '23 Data by YCharts Victoria's Secret & C.o. (NYSE: VSCO) operates as a specialty retailer of women's intimate, and other apparel and beauty products worldwide. We have started overage on the firm in September 2023, with an initial bearish rating, stating that the firm's stock may just be a value trap. We have reiterated this "sell" rating in March 2024, due to the deteriorating financial performance and the uncerta ...

Financial Performance - In Q1 2024, net sales decreased by $48 million, or 3%, to $1.359 billion compared to $1.407 billion in Q1 2023, with comparable sales down 5%[87] - North American store sales fell by $57 million, or 7%, to $729 million, primarily due to decreases in average unit retail, traffic, and conversion[101] - Direct channel sales decreased by $15 million, or 3%, to $449 million, as an increase in conversion was offset by declines in average unit retail and traffic[101] - International net sales increased by $24 million, or 16%, to $181 million, driven by growth in China and wholesale arrangements[102] - Operating income for Q1 2024 was $26 million, down from $28 million in Q1 2023, with an operating income rate of 1.9% compared to 2.0%[96] - Gross profit decreased slightly by $1 million to $501 million, while the gross profit rate increased to 36.9% from 35.7%[103] - General, administrative, and store operating expenses rose by $1 million to $475 million, with the expense rate increasing to 34.9% from 33.7%[106] Tax and Compliance - The effective tax rate for Q1 2024 was 151.1%, significantly higher than 34.0% in Q1 2023, primarily due to additional tax expenses from share-based compensation[109] - The company is in compliance with all covenants under its long-term debt and borrowing facilities as of May 4, 2024[136] Strategic Focus - The company continues to focus on strategic priorities: Accelerate Our Core, Ignite Growth, and Transform the Foundation[88] Store Operations - The company operates a total of 1,370 stores as of May 4, 2024, with a net increase of 21 stores during the quarter[93] Cash Flow and Financing - Net cash used for operating activities in Q1 2024 was $116 million, an increase of $8 million compared to Q1 2023[117] - Capital expenditures for Q1 2024 were $39 million, down from $55 million in Q1 2023, primarily related to store capital programs and technology investments[118][119] - Cash and cash equivalents at the end of Q1 2024 were $105 million, down from $132 million at the end of Q1 2023[116] - Net cash used for financing activities in Q1 2024 was $10 million, significantly lower than $132 million in Q1 2023[121][122] - Cash paid for interest in Q1 2024 was $12 million, compared to $13 million in Q1 2023[131] Debt and Credit - Total long-term debt as of May 4, 2024, was $1,119 million, a slight decrease from $1,120 million as of February 3, 2024[131] - The company borrowed $90 million and made repayments of $15 million under the ABL Facility during the first quarter of 2024 and 2023, respectively[135] - The principal value of the company's outstanding debt as of May 4, 2024, was $990 million, with an estimated fair value of $867 million[149] - The company's credit ratings as of May 4, 2024, are Ba3 from Moody's and BB from S&P for corporate ratings[137] Investments and Obligations - The company’s contractual obligations primarily consist of long-term debt, operating leases, and purchase orders for merchandise inventory[138] - The company’s investment portfolio is primarily comprised of interest-bearing instruments, with no material risk to principal associated with interest rate changes[147] - The company maintains cash and cash equivalents primarily in bank deposits, monitoring the credit standing of financial institutions[151] Accounting Standards - The company has not adopted any new accounting standards during the first quarter of 2024 that had a material impact on its results[139]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, The ...

Victoria's Secret & Co. (NYSE:VSCO) Q1 2024 Earnings Conference Call June 6, 2024 8:00 AM ET Company Participants Kevin Wynk - VP, External Financial Reporting & IR Martin Waters - Chief Executive Officer Tim Johnson - Chief Financial Officer Conference Call Participants Simeon Siegel - BMO Capital Markets Dana Telsey - Telsey Group Lorraine Hutchinson - Bank of America Brooke Roach - Goldman Sachs Ike Boruchow - Wells Fargo Warren Cheng - Evercore ISI Jonna Kim - TD Cowen Alex Straton - Morgan Stanley Marn ...

In the first quarter, Victoria's Secret saw a steady improvement in sales trends across its physical stores and online platforms in North America. This positive momentum was evident for both the Victoria's Secret and PINK brands. Despite a tough retail landscape and high competition in promotions, the company successfully increased gross margin rate compared to the previous year by effectively managing inventory and strategically driving customer traffic. Victoria's Secret & Co. (VSCO) posted first-quarter ...

• our ability to successfully implement our strategic plan; • difficulties arising from turnover in company leadership or other key positions; • our ability to attract, develop and retain qualified associates and manage labor-related costs; • our ability to successfully operate and expand internationally and related risks; • our ability to successfully operate and grow our direct channel business; | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |------------------------------------ ...

Financial Performance - Revenue for the quarter ended April 2024 was $1.36 billion, a 3.4% decrease compared to the same period last year [1] - EPS for the quarter was $0.12, down from $0.28 in the year-ago quarter [1] - The reported revenue matched the Zacks Consensus Estimate of $1.36 billion, while the EPS of $0.12 exceeded the consensus estimate of $0.11 by 9.09% [1] Stock Performance - Victoria's Secret shares have returned +24.8% over the past month, outperforming the Zacks S&P 500 composite's +3.4% change [3] - The stock currently has a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3] Key Metrics - Comparable Sales - Stores and Direct: -5%, worse than the -3.8% average estimate based on three analysts [4] - Comparable Sales - Stores Only: -8%, slightly worse than the -7.5% average estimate based on two analysts [4] - Total stores - Company-Operated: 828, slightly below the 829 average estimate based on two analysts [4] - Total stores - China Joint Venture: 71, slightly above the 70 average estimate based on two analysts [4] - Geographic Net Sales - Direct: $448.80 million, exceeding the two-analyst average estimate of $439.03 million, but representing a year-over-year change of -3.4% [4]

Over the last four quarters, the company has surpassed consensus EPS estimates two times. Victoria's Secret, which belongs to the Zacks Leisure and Recreation Products industry, posted revenues of $1.36 billion for the quarter ended April 2024, in line with the Zacks Consensus Estimate. This compares to year-ago revenues of $1.41 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently- ...

Sales Performance - First quarter 2024 net sales decreased by 3% to $1.359 billion compared to $1.407 billion in the first quarter of 2023[5] - International net sales increased by 15.6% to $181.5 million in the first quarter of 2024[17] - Total comparable sales for the first quarter of 2024 decreased by 5%[5] - Second quarter 2024 net sales are forecasted to decrease in the low-single digit range compared to $1.427 billion in the second quarter of 2023[6] - Full year 2024 net sales are forecasted to be about $6.0 billion, down low-single digits compared to fiscal year 2023[7] - Net sales for 2024 were $1.36 billion, a decrease of 3.4% compared to $1.41 billion in 2023[21] Profitability and Income - First quarter 2024 adjusted operating income was $40 million, at the high-end of the preliminary results range[4] - Adjusted operating income for fiscal year 2024 is expected to be about $250 million to $275 million[7] - Gross margin rate in the first quarter of 2024 was above last year due to disciplined inventory management[2] - The company reported a net loss of $4 million, or $0.05 per diluted share, for the first quarter of 2024[3] - Gross profit for 2024 was $501.3 million, slightly down from $502.4 million in 2023[21] - Operating income for 2024 was $26.3 million, a decrease from $28.3 million in 2023[21] - Net loss attributable to Victoria's Secret & Co. for 2024 was $3.6 million, compared to a net income of $0.7 million in 2023[21] - Adjusted operating income for 2024 was $39.6 million, compared to $55.0 million in 2023[24] - Adjusted net income attributable to Victoria's Secret & Co. for 2024 was $9.1 million, down from $21.9 million in 2023[24] - Adjusted net income per diluted share for 2024 was $0.12, compared to $0.28 in 2023[24] Digital Sales and Customer Experience - Digital sales performance outpaced stores due to investments in improving the customer experience[2] Acquisition and Restructuring - Adore Me acquisition-related items in 2024 included an $8.1 million pre-tax charge[24] - Amortization of intangible assets was $6.3 million in both 2024 and 2023[25] - Restructuring charge in 2023 was $11.1 million, with no such charge in 2024[26]

Core Insights - Victoria's Secret & Co. reported first quarter results that were at the high-end of previously announced preliminary results, with adjusted operating income reaching $40 million and net sales of $1.359 billion, a decrease of 3% year-over-year [1][5][4] - The company provided guidance for the second quarter, forecasting a low-single digit decrease in net sales compared to the previous year, and reaffirmed its full-year 2024 outlook with expected net sales of approximately $6.0 billion [6][7] Financial Performance - The company experienced a net loss of $4 million, or $0.05 per diluted share, for the first quarter of 2024, compared to a net income of $1 million, or $0.01 per diluted share, in the same quarter of 2023 [3] - Adjusted net income for the first quarter of 2024 was $9 million, or $0.12 per diluted share, down from $22 million, or $0.28 per diluted share, in the first quarter of 2023 [4][24] Sales and Market Trends - Total comparable sales for the first quarter of 2024 decreased by 5%, with North American store sales down 7.2% and direct sales down 3.4% [5][17] - The international business saw net sales growth in the mid-teens, indicating a positive trend outside North America [2] Operational Insights - The company noted improvements in customer traffic in stores and strong digital sales performance, which outpaced store sales due to investments in customer experience [2] - The SG&A rate was favorable, reflecting increased efficiency within the operating model [2] Proxy Advisory Recommendations - Leading independent proxy advisory firms recommended shareholders vote in favor of all director candidates, the approval of increased capacity under the stock plan, and the say-on-pay proposal at the upcoming annual meeting [9]