Victoria’s Secret & Co. VSCO posted third-quarter fiscal 2024 results, with the top and the bottom lines surpassing the Zacks Consensus Estimate. Earnings beat the consensus estimate for the fourth straight quarter. Following the results, the company’s shares increased 1.1% in the after-hour trading session yesterday.

Victoria’s Secret performed strongly across all regions, channels and major product categories during the quarter, with its key brands, Victoria’s Secret, PINK and Adore Me, exceeding the prior-year numbers. The company excelled during major retail moments, starting with PINK’s back-to-campus event in August, the launch of VSX sport in September and culminating in October’s return of the iconic VS Fashion Show. These results were driven by compelling product offerings, emotionally resonant designs and elevated brand marketing that strengthened customer engagement and storytelling.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

VSCO’s Q3 in Details

Victoria’s Secret reported an adjusted loss of 50 cents per share, narrower than the Zacks Consensus Estimate of a loss of 64 cents. In the prior-year quarter, the company had reported an adjusted loss per share of 86 cents.

Net sales rose 6.5% year over year to $1,347.4 million. Moreover, the metric beat the Zacks Consensus Estimate of $1,289 million. The company’s comparable sales increased 3% on a year-over-year basis.

VSCO’s net sales from the North America channel came in at $738.1 million, up 2.1% year over year. Direct channel’s net sales rose 7.5% year over year to $411 million. Net sales from the International channel jumped 24.2% year over year to $198.3 million.

VSCO’s Margin & Costs

The gross profit increased 9.6% year over year to $468.3 million. The gross margin expanded 100 basis points to 34.8% in the quarter under review. Cost of sales was $879.1 million, down 4.9% year over year.

General, administrative and store operating expenses increased 4.1% year over year to $515 million. Interest expenses were $22.4 million, lower than $26.3 million in the prior-year quarter.

VSCO’s Outlook

For the fourth quarter of fiscal 2024, management expects net sales to increase in the range of nearly 2% to 4% year over year. Adjusted operating income for fourth-quarter fiscal 2024 is forecasted in the range of $240-$270 million. It anticipates adjusted net earnings in the band of $2.00-$2.30 per share.

The company expects net sales for fiscal 2024 to increase 1% to 2% compared to the prior guidance of down 1%. Adjusted operating income for fiscal 2024 is estimated between $315 million and $345 million compared with the previous range of $275 million to $300 million.

VSCO’s Zacks Rank & Key Picks

VSCO has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Retail-Wholesale sector have been discussed below.

Deckers Outdoor Corporation DECK currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

DECK delivered trailing four-quarter earnings surprise of 41.1%, on average. The stock has gained 8.2% in the past six months. The Zacks Consensus Estimate for DECK’s fiscal 2025 sales and EPS indicates growth of 13.6% and 12.8%, respectively, from the year-ago period’s levels.

Brinker International, Inc. EAT presently flaunts a Zacks Rank of 1. EAT delivered a trailing four-quarter earnings surprise of 12.1%, on average. The stock has surged 78% in the past six months.

The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 7.9% and 34.6%, respectively, from the year-ago period’s levels.

Sprouts Farmers Market, Inc. SFM currently sports a Zacks Rank of 1. SFM delivered a trailing four-quarter earnings surprise of 15.3%, on average. The stock has risen 95.7% in the past six months.

The Zacks Consensus Estimate for SFM’s 2024 sales and EPS indicates a rise of 12.2% and 29.6%, respectively, from the year-ago period’s levels.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Brinker International, Inc. (EAT) : Free Stock Analysis Report

Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report

Victoria's Secret & Co. (VSCO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research