Victoria's Secret earnings slashed on increased promotional activity, sales dive 5%

By

Benjamin Fitzgerald

Published
Jun 1, 2023

Victoria's Secret & Co. announced on Wednesday first-quarter revenues fell 5% to $1.407 billion, as the lingerie giant blamed a volatile macro environment and increased promotional activity, which also hit margins.

The Reynoldsburg, Ohio-based company reported a double-digit decline in comparable sales, down 11%, for the three months ending April 29.
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The owner of its namesake Victoria's Secret brand, and Adore Me, said it managed to stay in the black during the quarter, with earnings dropping to $1 million, or $0.01 per diluted share, compared to net income of $81 million, or $0.93 per diluted share, in the prior-year period.

“The first quarter continued to be a volatile macro environment for our customer and as the quarter progressed business became more challenging. Sales were in-line with our original expectations; however, we were more promotional than planned and ended the quarter at the lower-end of our adjusted operating income guidance. Sales performance was particularly challenging in our core categories where there was significant decline in the overall stores and digital intimates market in North America," said ​chief executive officer, Martin Waters.

"Inventory levels in our Victoria’s Secret and Pink business ended the quarter down low-double digits compared to last year and we are prudently positioned as we move forward. Our international business continued its stellar growth around the globe with China as a particular bright spot, and our recent acquisition, Adore Me, met our expectations during its first quarter as a part of Victoria’s Secret & Co.”

As a result of the lacklustre results, Victoria's Secret said it is adjusting to its full-year guidance for fiscal 2023.
It now forecasts full-year 2023 net sales to be in the range of flat to down low-single digits, compared to last year’s net sales of $6.344 billion.