Victorias Secret Co Releases Second Quarter 2024 Financial Results
Intellectia.AI2024-08-29
Victoria's Secret & Co. Releases Second Quarter 2024 Financial Results
Victoria's Secret & Co. (NYSE: VSCO) has released its financial results for the second quarter ending August 3, 2024.
Key Financial Metrics
| Financial Metric | Q2 2024 | Q2 2023 | Year-Over-Year Change (%) | Consensus Estimates Q2 2024 |
|---|---|---|---|---|
| Total Revenue | $1.417B | $1.427B | -1% | $1.41B |
| Earnings Per Share (EPS) | $0.40 | ($0.02) | N/A | $0.36 |
| Operating Income | $62M | $26M | 138.5% | N/A |
| Net Income | $32M | ($1M) | N/A | N/A |
Financial Performance Interpretation
Victoria's Secret reported a slight decrease in revenue YoY, matching well with consensus estimates. The notable achievement here is the significant improvement in EPS and operating income, indicating operational efficiency and better cost management.
Segment Revenue Performance
| Segment | Q2 2024 | Q2 2023 | Year-Over-Year Change (%) |
|---|---|---|---|
| North America | N/A | N/A | Improved sequentially |
| International | N/A | N/A | High single digits growth |
| Adore Me | N/A | N/A | High single digits growth |
Segment Performance Interpretation
The sequential improvement in North American sales and high single-digit growth in International and Adore Me segments reflect a positive reception of new merchandise and successful product launches. This indicates a growing acceptance of the brand's recent strategies and offerings.
Key Developments and Operational Highlights
- New Product Launches: Success with the Victoria's Secret Dream bra collection and PINK Friday back-to-campus event.
- Inventory Management: Improved product acceptance and disciplined inventory management led to gross margin and rate expansion.
- Cost Management: A decrease in SG&A dollars and improved leverage year-over-year.
- Strategic Events: Planned VSX sport launch and return of Victoria's Secret Fashion Show.
Summary of Officer Comments
Interim CEO and CFO TJ Johnson noted that the company performed at the high end of its expectations, driven by new merchandise deliveries and events. He highlighted improvements in North American business trends and positive customer feedback on fall assortments. Despite the challenging consumer environment, the company remains focused on leveraging its market position in the intimates sector.
Dividends and Share Repurchase Program
No announcements were made regarding dividends or share repurchase programs in the provided report.
Forward Guidance
Victoria's Secret raised its full-year 2024 outlook:
- Full Year 2024:
- Net sales are expected to decline approximately 1% (better than previous guide of low-single digits).
-
Adjusted operating income forecasted to range between $275 million to $300 million (previously $250 million to $275 million).
-
Third Quarter 2024:
- Net sales expected to increase by low-single digits compared to Q3 2023.
- Adjusted operating loss expected to be between $40 million to $60 million.
- Adjusted net loss per share estimated to range between $0.60 to $0.80.
Stock Price Movement
Upon the earnings release, Victoria's Secret experienced a post-event stock price change of +0.65%.
In summary, Victoria's Secret & Co. delivered a mixed bag of results for Q2 2024 with slight declines in revenue but significant improvements in profit metrics. The company continues to execute its strategies effectively, with reasons for cautious optimism for the upcoming quarters.
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