Victoria's Secret Beats Fiscal Q1 Sales Guidance

Financial Performance - Victoria's Secret reported fiscal Q1 2025 net sales of $1.353 billion, approximately flat year over year, with adjusted operating income of $32 million and adjusted EPS of $0.09, exceeding guidance [1] - The company maintained its full-year net sales target of $6.2 billion to $6.3 billion but guided for adjusted EPS of $1.80 to $2.20, down from $2.69 in 2024, due to tariff headwinds and ongoing strategic investments [1] Strategic Leadership Changes - A major leadership overhaul was executed between January and May, establishing a brand president model and hiring new executives with sector expertise [2] - New appointments include Anne Stevenson as president of Victoria's Secret, Ali Dillon as president of Pink, and Amy Kaczurek as president of Beauty, alongside a new chief marketing officer and executive creative director [3] Category Performance - The Pink apparel segment recorded its third consecutive quarter of positive comparable sales, with improvements in margin and average unit retail price, driven by faster fashion cycles and enhanced customer engagement [4] - The beauty segment achieved its seventh consecutive quarter of growth, representing about 25% of the business, with strong international performance indicating opportunities for future expansion [5] Cost Management and Financial Strategy - The company reduced its adjusted SG&A rate by 120 basis points year-over-year to 32.8%, better than the guidance range, through cost-cutting measures and a strategic shift in marketing spending [6][8] - Victoria's Secret renewed its $750 million asset-based lending facility at lower interest rates, enhancing liquidity and financial flexibility [6][8] Future Outlook - Management maintained net sales guidance for fiscal 2025 of $6.2 billion to $6.3 billion, with operating income expected between $270 million and $320 million, and adjusted EPS projected at $1.80 to $2.20 [9] - Plans include opening 16 new North American stores, closing 30 to 40 locations, and renovating 40 locations to the "Store of the Future" model, which will comprise a significant portion of the store base by year-end [9]