Despite a “challenging” environment, Victoria’s Secret & Co. is on “the right” path” after completing its full as an independent public company.
“As we look into the new year, we recognize the environment will likely remain challenging for the foreseeable future,” stated CEO Martin Waters. “However, we firmly believe our brand repositioning efforts are tracking well and our plans for growth outlined at our Investor Day in October have us on the right path. Our strategic growth plan and our focus on strengthening our core, igniting growth, and transforming the foundation is beginning to come to life.”
The retailer reported that its net income fell 29.7% to $173 million in the quarter ended Jan. 28, from $246.1 million in the year-ago period. Adjusted earnings per share came to $2.47, ahead of the $2.34 analysts had projected.
Sales fell 7.1% to $2 billion from $2.2 billion and were in line with expectations. Total comparable sales decreased 6%.
“In the holiday quarter, our teams controlled what they could control despite a challenging economic environment for our customer, delivered fourth quarter adjusted operating income and adjusted earnings per diluted share above our most recent guidance, and exited the year with Victoria’s Secret and PINK inventory levels down double digits on an adjusted basis — prudently positioned to begin 2023,” said Waters.
For the full year, income fell 46% to $348.1 million. Sales declined 6.4% to $6.3 billion.
Victoria’s Secret plans for 2023 include continuing to build “on its core offerings as the leader in the intimates market through a pipeline of bra launches, the recent launch of our new Victoria’s Secret and PINK customer loyalty program,” Walters said.
The retailer also plans on leveraging Adore Me’s customer technology through its established market-leading brands, and expanding its international footprint both in number of stores and number of countries. (Victoria’s Secret completed its acquisition of the digitally native, intimate apparel brand Adore Me earlier this year.)
The company is forecasting full year 2023 net sales to increase in the mid-single digit range compared to last year’s net sales of $6.344 billion. First quarter 2023 net sales are expected to decrease in the mid-single digit range compared to last year’s first quarter net sales of $1.484 billion.
The company predicts adjusted operating income for the first quarter of 2023 to be in the range of $55 million to $85 million. Adjusted net income for the quarter is estimated to be in the range of $0.30 to $0.60 per diluted share.
Victoria’s Secret has a global footprint of approximately 1,360 retail stores in approximately 70 countries.