Shares of Victoria's Secret (VSCO +4.07%) plummeted 29.7% on Thursday after the lingerie, clothing, and beauty-products retailer announced reasonably solid quarterly results but followed with underwhelming forward guidance.
NYSE: VSCO
Key Data Points
Victoria's Secret's decent fourth quarter wasn't enough
For its fiscal fourth quarter ended Feb. 3, 2024, Victoria's Secret's net sales grew 3% year over year, to $2.082 billion, including a comparable-sales decline of 6% (noting that there was an extra week in this fourth quarter, as compared to 2022). On the bottom line, that translated to adjusted (non-GAAP) net income of $204 million, or $2.58 per share. Analysts, on average, were expecting adjusted earnings of $2.46 per share on roughly the same revenue.
Victoria's Secret CEO Martin Waters said weekly sales trends were "volatile" during the quarter but improved in North America on a sequential basis. North America sales were down 3.6% year over year to $1.154 billion, while international sales grew 23.8% to $194.3 million. Victoria's Secret's direct sales channels saw revenue climb 10.1% year over year to $734 million.
What's next for Victoria's Secret investors?
The company issued guidance for first-quarter net sales to decline in the mid-single-digit percent range year over year -- far below estimates for a modest 1.9% decline. For the full fiscal year 2024, the company expects sales to fall in the low-single-digit percent range to around $6 billion, again below estimates for sales of $6.18 billion.
All told, this report didn't do much to instill confidence that Victoria's Secret's turnaround is taking hold anytime soon. The stock is responding in kind.
