Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Victoria's Secret due to lower revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - The earnings report is expected on June 5, 2025, with a consensus EPS estimate of $0.04, reflecting a -66.7% year-over-year change, and revenues projected at $1.33 billion, down 2.1% from the previous year [3][4]. Estimate Revisions - The consensus EPS estimate has been revised 7.02% higher in the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - Victoria's Secret has a positive Earnings ESP of +54.55%, suggesting analysts are optimistic about the company's earnings prospects, despite a Zacks Rank of 3 [12]. Historical Performance - In the last reported quarter, Victoria's Secret exceeded the expected EPS of $2.30 by delivering $2.60, resulting in a +13.04% surprise. The company has beaten consensus EPS estimates in the last four quarters [13][14]. Industry Comparison - Genesco, another player in the retail apparel industry, is expected to report an EPS of $2.14, indicating a -1.9% year-over-year change, with revenues projected at $463.91 million, up 1.4% [19].

Core Insights - Victoria's Secret is experiencing a significant website outage attributed to a "security incident" that began during a Memorial Day sale [1][3] - The company has engaged third-party experts and is working to restore operations while keeping brick-and-mortar locations open [5] Digital Sales Impact - The company reported $2 billion in digital sales last year, accounting for approximately one-third of its total revenue [4] Stock Market Reaction - Shares of Victoria's Secret fell by 6.8% on Wednesday due to the ongoing website issues [5]

Core Viewpoint - Victoria's Secret & Co. (NYSE: VSCO) is expected to report its Q1 numbers on June 5th, which may not significantly impress investors [1] Group 1: Company Overview - Victoria's Secret is preparing to release its quarterly earnings report, with anticipation that the results will not be groundbreaking [1] Group 2: Investment Strategy - The investment approach discussed emphasizes a long-term horizon, typically between 5 to 10 years, focusing on a balanced portfolio that includes growth, value, and dividend-paying stocks, with a particular inclination towards value stocks [1]

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Core Viewpoint - The Board of Directors of Victoria's Secret & Co. has adopted a limited-duration shareholder rights plan to protect the interests of all shareholders in response to significant stock accumulation by BBRC International Pte Limited [2][3][4] Group 1: Rights Plan Details - The Rights Plan is effective immediately and will expire in one year, specifically on May 18, 2026 [2][8] - Each shareholder will receive one right for each share of common stock as of May 29, 2025, which will initially trade with the common stock [5][8] - The rights become exercisable if any person acquires 15% or more of the outstanding common stock, or 20% for certain passive investors [5][6] Group 2: Rationale for the Rights Plan - The Board adopted the Rights Plan due to the substantial accumulation of shares by BBRC, which began increasing its position to approximately 13% starting in March 2025 [3][6] - The Board expressed concerns about the current market dislocation in the retail sector and its impact on the trading value of the Company's shares, which they believe does not reflect the inherent value of VS&Co [3][4] - The Rights Plan aims to ensure fair treatment of all shareholders in the event of a takeover and to prevent control from being gained without appropriate compensation [4][6] Group 3: Engagement with BBRC - The Company has maintained open dialogue with BBRC and values their investment, indicating a willingness to continue discussions [4] - BBRC has a history of acquiring controlling interests in retail companies and has recently launched a new global lingerie and beauty brand [6][4] Group 4: Company Overview - Victoria's Secret & Co. is a specialty retailer known for its fashion-inspired collections, including lingerie, sleepwear, and beauty products, with a global presence of approximately 1,380 retail stores in nearly 70 countries [9]

Core Viewpoint - Victoria's Secret & Co. is set to release its first quarter 2025 earnings on June 5, 2025, with a live conference call scheduled for 8:30 a.m. ET, providing an opportunity for stakeholders to gain insights into the company's financial performance and strategic direction [1][2]. Company Overview - Victoria's Secret & Co. (NYSE: VSCO) is a specialty retailer known for its modern, fashion-inspired collections, including bras, lingerie, apparel, and fragrances, with a commitment to empowering women and a workforce of over 30,000 associates across approximately 1,380 retail stores in nearly 70 countries [3]. - The company operates leading brands, Victoria's Secret and PINK, alongside Adore Me, a technology-driven intimates brand catering to women of all sizes and budgets [3]. Earnings Call Details - The earnings release and related financial information will be available on the company's investor relations website approximately one hour before the live webcast [1]. - For those unable to attend the live call, an archived version will be accessible on the company's website [2]. Contact Information - For further inquiries, the company provides contact details for investor relations and media relations, ensuring stakeholders can obtain additional information as needed [6].

Core Insights - Victoria's Secret & Co. has announced strategic leadership appointments aimed at accelerating growth and innovation across its brand portfolio, focusing on customer-centric operations and brand expertise [1][2][3] Leadership Appointments - Anne Stephenson has been appointed President of Victoria's Secret, effective May 12, bringing over 25 years of experience in merchandising and brand development [3][8] - Ali Dillon will join as President of PINK on May 12, with over two decades of experience in product strategy and brand development [4][10] - Amy Kocourek was appointed President of Beauty in March, known for her track record in driving revenue growth and category expansion [5][11] - Adam Selman will join as SVP, Executive Creative Director on April 14, recognized for his innovative fashion design and brand storytelling [6][12] Strategic Focus - The new leadership team is expected to enhance the execution of the Path to Potential strategy, which aims to deliver value for stakeholders by focusing on growth brands Victoria's Secret and PINK, alongside a strong Beauty business [2][7] - The appointments reflect the company's commitment to innovation and excellence, aiming to strengthen market leadership and connect with the next generation of consumers [3][7]

Core Insights - Victoria's Secret & Co. announced strategic leadership appointments to accelerate growth and enhance customer focus as part of its Path to Potential strategy [1][2][7] Leadership Appointments - Anne Stephenson appointed as President of Victoria's Secret, effective May 12, bringing over 25 years of merchandising experience [3][8] - Ali Dillon will join as President of PINK on May 12, with over two decades of experience in product strategy and brand development [4][10] - Amy Kocourek appointed as President of Beauty in March, known for driving revenue growth and category expansion [5][11] - Adam Selman will join as SVP, Executive Creative Director on April 14, recognized for his bold fashion design and brand storytelling [6][12] Strategic Focus - The leadership team aims to enhance brand projection and create meaningful consumer connections, reinforcing the company's mission to support women [7][13]

Employment and Workforce - As of February 1, 2025, Victoria's Secret & Co. employed approximately 31,000 associates, with 76% working in stores and 9% in distribution centers[71] - The company is committed to ensuring equal pay across gender, race, and background, conducting periodic third-party reviews for fairness[73] - Victoria's Secret & Co. is focused on recruiting and developing diverse talent through robust career development programs and mentorship[70] - The company is committed to workplace safety and well-being, continuously investing in safety measures and training for associates[74] - Victoria's Secret & Co. emphasizes a high-performance culture, fostering innovation and inclusivity among its associates to drive business success[66][67] Competition and Market Position - Victoria's Secret & Co. faces significant competition from various retailers, including specialty and online retailers, and focuses on brand image and customer experience to maintain market leadership[64][65] - The retail industry is highly competitive, and the company competes with various retailers, including online channels, which may affect its market position[120] - Increased competition and declines in traffic could result in reduced sales and loss of market share, adversely impacting financial performance[122] Financial Performance - Net sales for 2024 were $6,230 million, a slight increase of 0.8% compared to $6,182 million in 2023[347] - Gross profit for 2024 was $2,284 million, representing a gross margin of approximately 36.7%[347] - Operating income increased to $310 million in 2024, up from $246 million in 2023, reflecting a growth of 26%[347] - Net income attributable to Victoria's Secret & Co. for 2024 was $165 million, compared to $109 million in 2023, marking a 51.4% increase[347] - The company reported a decrease in inventories to $955 million as of February 1, 2025, down from $985 million in the previous year[352] - Total assets decreased to $4,532 million in 2025 from $4,600 million in 2024[352] - Total liabilities decreased to $3,868 million in 2025, down from $4,162 million in 2024[352] - Shareholders' equity increased to $664 million in 2025, compared to $438 million in 2024, indicating a significant improvement[352] - The net income per diluted share attributable to Victoria's Secret & Co. was $2.05 for 2024, up from $1.39 in 2023, reflecting a 47.5% increase[347] - Net income for the fiscal year 2024 was $169 million, an increase of 45.7% compared to $116 million in 2023[357] - Total comprehensive income for 2024 was $164 million, compared to $108 million in 2023, reflecting a significant improvement[357] - Cash provided by operating activities increased to $425 million in 2024 from $389 million in 2023, indicating strong operational performance[357] - Capital expenditures for 2024 were $178 million, a decrease from $256 million in 2023, showing a reduction in investment spending[357] - The company repurchased $126 million of common stock in 2024, down from $125 million in 2023, indicating a consistent approach to capital return[357] Economic and Regulatory Risks - Adverse economic conditions, such as inflation and supply chain challenges, could materially impact the company's financial performance and consumer demand[86][88] - Future economic uncertainties, including geopolitical conflicts and health hazards, may disrupt consumer spending and confidence, affecting sales and profitability[89][90] - The company is closely monitoring the impact of recent tariffs, including a 10% tariff on nearly all imports from China and a 25% tariff on certain imports from Mexico and Canada, which may affect sourcing strategies and pricing[92][93] - The company faces risks related to compliance with various legal and regulatory requirements, which could impact its operations and financial performance[150] - Changes in laws and regulations regarding data privacy and security could have a material adverse effect on the company's reputation and financial condition[146] Strategic Initiatives and Growth - The company is executing a long-term strategic growth plan aimed at increasing revenue and operating income, with significant investments in customer-centric initiatives and global expansion[94] - The company plans to expand internationally through partnerships and joint ventures, facing risks related to local market familiarity and competition[105] - The company acquired Adore Me in 2022, with the success of this acquisition dependent on effective integration and realization of anticipated benefits[111] - The company completed the acquisition of Adore Me on December 30, 2022, enhancing its digital presence in the intimates market[360] Operational and Supply Chain Risks - The company’s digital operations are subject to risks that could adversely affect business performance, including cybersecurity incidents and supply chain challenges[108] - Global sourcing and distribution are subject to risks, including customs regulations and potential tariffs, which could impact operational efficiency[124] - The company is susceptible to local disruptions due to geographic concentration of production and distribution facilities, which could lead to supply chain issues[128] - Fluctuations in input costs, including freight and raw materials, may adversely affect profit margins and overall financial condition[131] - Climate change and related regulations could increase operational costs and impact consumer behavior, potentially affecting financial results[134] Cybersecurity and Compliance - The company is subject to significant cybersecurity risks, which could adversely affect its operations, financial condition, and cash flows[142] - The company maintains cybersecurity insurance, but it may not be sufficient to cover all potential claims related to breaches or failures[145] - The company faces risks related to compliance with ethical, social, product, labor, privacy, and environmental standards, which could adversely affect its reputation and lead to consumer actions such as boycotts[116] Financial Structure and Debt - The company has debt obligations that may restrict its business operations and financial flexibility, particularly in a high interest rate environment[155] - The company may incur substantial additional indebtedness in the future, which could impose further restrictions on its business strategies[159] - The principal value of the company's outstanding debt as of February 1, 2025, is $987 million, with an estimated fair value of $940 million[312] - As of February 1, 2025, the company's outstanding long-term debt includes $387 million under the Term Loan Facility with a variable interest rate based on Term SOFR[311] - The company's ability to maintain its credit rating is crucial for accessing capital and managing borrowing costs[160] Shareholder and Market Considerations - Shareholder activism could divert management's attention and resources, potentially impacting the company's stock price and business strategy[149] - Fluctuations in the company's stock price may occur due to various factors, including market conditions and analyst coverage[161] - The company's common stock is subordinate to all current and future indebtedness and preferred stock, affecting its value and voting power[172] - The company may issue additional common stock or securities, which could dilute existing stockholders' ownership percentages[169] - The exclusive forum provisions in the company's Bylaws may limit stockholders' ability to obtain a favorable judicial forum for disputes[168] Community Engagement - The company recognizes the importance of community engagement and supports associates in giving back through donation matching and volunteer opportunities[69]

Group 1 - The article recommends a hold rating for Victoria's Secret (NYSE: VSCO) until more tangible turnaround traction is observed, particularly with growth sustaining in the mid-single-digits range [1] - An ideal investment is characterized by performance in a sector projected to experience structural organic growth exceeding GDP growth over the next 5-10 years [1] - Profits should stem from sustainable competitive advantages that translate into attractive unit economics, managed by competent, ethical, and long-term thinkers, and should be fairly valued [1]