REYNOLDSBURG, Ohio - Victoria's Secret & Co. (NYSE:VSCO) reported a higher-than-expected first-quarter profit on Wednesday, with adjusted earnings per share (EPS) of $0.12, surpassing analyst estimates of $0.08.
The lingerie retailer's revenue remained steady at $1.36 billion, aligning with the consensus estimate and marking a 3% decline from the same quarter last year.
CEO Martin Waters (NYSE:WAT) attributed the quarter's success to the company's ability to deliver "meaningful newness in merchandise and brand projection," which resonated with customers, especially in April, the strongest month of the quarter. Despite a challenging retail environment in North America and a highly competitive promotional landscape, the company managed to improve its gross margin rate year-over-year (YoY) by effectively managing inventory and maintaining disciplined promotional strategies.
The company's stock saw a modest uptick of 1.2% following the earnings release.
For the second quarter of 2024, Victoria's Secret forecasts an adjusted EPS ranging from $0.05 to $0.20, with the midpoint of the guidance range at $0.125, above the analyst consensus of $0.08. Net sales are expected to see a low-single digit decrease compared to the second quarter of the previous year's $1.427 billion. Adjusted operating income is projected to be between $30 million and $45 million.
The company also reaffirmed its full-year outlook for fiscal year 2024, expecting net sales to be around $6.0 billion, which would be a low-single digit decline compared to the previous fiscal year. Adjusted operating income for the year is anticipated to be in the range of $250 million to $275 million.
Waters expressed cautious optimism regarding the broader retail environment in North America but remains confident in the company's global brand strength and long-term financial growth potential. The company's international business continued to grow, with net sales increasing in the mid-teens again in the first quarter.
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