Victoria's Secret & Co. Reports Fourth Quarter 2024 Results

Fourth quarter comparable sales increase 5%

Operating Income and EPS exceed expectations

Provides initial full year and first quarter 2025 guidance

REYNOLDSBURG, Ohio, March 05, 2025 (GLOBE NEWSWIRE) -- Victoria's Secret & Co. ("VS&Co" or the "Company") $(VSCO)$ today reported financial results for the fourth quarter and fiscal year ended February 1, 2025.

"I am pleased with the strength of our fourth quarter holiday results, which saw sales up in both our Victoria's Secret and PINK brands and our powerhouse Beauty business. Sales increased across most major merchandise categories, in our stores and digital channels, and in both our North America and International businesses. We won in the big moments of the quarter and gained more than our fair share of the traffic in the mall and online. The teams focused on execution and drove healthy margins, controlled costs, and managed inventory levels extremely well in a highly competitive and promotional holiday environment," said VS&Co CEO Hillary Super.

"During the holiday season we clearly connected emotionally with our customer through our merchandise offering of the accessible luxuries she loves. After my first holiday season with the business, I continue to be optimistic about our future, our opportunity to further differentiate the brands with compelling storytelling and make even deeper emotional connections with our customers. As we look forward to 2025 and the future, we recognize there are near-term headwinds and ongoing uncertainty in the macro environment which we will manage aggressively while also working to build upon our solid foundation, realize the full potential of our brands and drive long-term, sustainable growth."

Fourth Quarter 2024 Results

The Company reported net sales of $2.106 billion for the 13-week fourth quarter of 2024, an increase of 1% compared to net sales of $2.082 billion for the 14-week fourth quarter of 2023. Total comparable sales for the fourth quarter of 2024 increased 5%.

The Company reported net income of $193 million, or $2.33 per diluted share for the 13-week fourth quarter of 2024. This result compares to net income of $181 million, or $2.29 per diluted share for the 14-week fourth quarter of 2023. Operating income for the 13-week fourth quarter of 2024 was $268 million compared to $258 million in the 14-week fourth quarter of 2023.

Excluding the impact of the items described at the conclusion of this press release, adjusted net income for the 13-week fourth quarter of 2024 was $216 million, or $2.60 per diluted share. This result compares to adjusted net income of $204 million, or $2.58 per diluted share for the 14-week fourth quarter of 2023. Adjusted operating income for the 13-week fourth quarter of 2024 was $299 million compared to $283 million in the 14-week fourth quarter of 2023.

In addition to the items described at the conclusion of this press release, in the fourth quarter of 2024 the Company recorded a change in its accounting estimate relating to expected future redemption on outstanding gift cards issued by the Company. As a result of this change in accounting estimate, the Company recognized a cumulative adjustment which increased net sales, gross margin, and operating income by approximately $26 million in the fourth quarter of 2024.

Excluding the impact from the change in accounting estimate relating to outstanding gift cards, fourth quarter 2024 net sales increased approximately 4%, or at the high-end of our previously communicated guidance range of 3% to 4% (excluding the impact of the extra week in the fourth quarter of 2023), and fourth quarter 2024 adjusted operating income would have been $273 million, or slightly above the high-end of our previously communicated guidance range of $260 million to $270 million.

As a reminder, the Company estimated the extra week in the fourth quarter of 2023 represented approximately $80 million in incremental net sales, approximately $20 million in incremental operating income and incremental net income per diluted share of approximately $0.20.

Full Year 2024 Results

The Company reported net sales of $6.230 billion for the 52-week fiscal year 2024, an increase of 1% compared to net sales of $6.182 billion for the 53-week fiscal year 2023. Total comparable sales for fiscal year 2024 were flat.

The Company reported net income of $165 million, or $2.05 per diluted share for the 52-week fiscal year 2024. This result compares to net income of $109 million, or $1.39 per diluted share for the 53-week fiscal year 2023. Operating income for the 52-week fiscal year 2024 was $310 million compared to $246 million in the 53-week fiscal year 2023.

Excluding the impact of the items described at the conclusion of this press release, adjusted net income for the 52-week fiscal year 2024 was $218 million, or $2.69 per diluted share. This result compares to adjusted net income of $178 million, or $2.27 per diluted share for the 53-week fiscal year 2023. Adjusted operating income for the 52-week fiscal year 2024 was $373 million compared to $327 million in the 53-week fiscal year 2023.

Excluding the impact from the change in accounting estimate relating to outstanding gift cards, fiscal year 2024 net sales increased approximately 2%, or at the high-end of our previously communicated guidance range of 1% to 2% (excluding the impact of the extra week in fiscal year 2023), and adjusted operating income would have been $347 million, or slightly above the high-end of our previously communicated guidance range of $315 million to $345 million.

Full Year and First Quarter 2025 Outlook

As we begin the new year, we recognize the macro environment is uncertain and consumer confidence has shifted. In addition, much of the U.S. experienced unseasonal weather creating an additional headwind to start the year, which is considered in our guidance for the first quarter. The Company is forecasting net sales for the first quarter of 2025 to be in the range of $1.30 billion to $1.33 billion compared to last year's first quarter net sales of $1.359 billion. At this forecasted level of net sales, adjusted operating income for the first quarter of 2025 is expected to be in the range of $10 million to $30 million.

Looking ahead, our forecast assumes that the environment will gradually get better as we move through the year and as we execute on our strategies designed to grow sales in both our North America and International businesses. The Company is forecasting fiscal year 2025 net sales to be in the range of $6.2 billion to $6.3 billion compared to net sales of $6.204 billion in fiscal year 2024, which excludes the gift card breakage benefit of $26 million recognized in the fourth quarter of 2024. At this forecasted level of net sales, adjusted operating income for fiscal year 2025 is expected to be in the range of $300 million to $350 million.

Forecasted adjusted operating income for the first quarter and full year 2025 excludes the financial impact of purchase accounting items related to the Adore Me acquisition, including expense (income) related to changes in the estimated fair value of contingent consideration and performance-based payments, as well as the amortization of intangible assets. The Company is not able to provide a reconciliation of forward-looking adjusted operating income to the most directly comparable forward-looking GAAP financial measures because the Company is unable to provide a meaningful or accurate reconciliation or estimation of certain reconciling items without unreasonable effort, due to the inherent difficulty in forecasting the timing of, and quantifying, the various purchase accounting items that are necessary for such reconciliation.

Quarterly Earnings Conference Call

Victoria's Secret & Co. will conduct its fourth quarter earnings call at 8:00 a.m. Eastern on Thursday, March 6, 2025. To listen, call 1-800-619-9066 (international dial-in number: 1-212-519-0836); passcode 5358727. For an audio replay, call 1-800-819-5743 (international replay number: 1-203-369-3828); passcode 2485654 or log onto www.victoriassecretandco.com. The materials accompanying the earnings call have been posted on the Investors section of the Company's website. The audio replay will be available approximately two hours after the conclusion of the call.

About Victoria's Secret & Co.

Victoria's Secret & Co. (NYSE: VSCO) is a specialty retailer of modern, fashion-inspired collections including signature bras, panties, lingerie, apparel, casual sleepwear, swim, lounge and sport as well as award-winning prestige fragrances and body care. VS&Co is comprised of market leading brands, Victoria's Secret and PINK, that share a common purpose of supporting women in all they do, and Adore Me, a technology-led, digital first innovative intimates brand serving women of all sizes and budgets at all phases of life. We are committed to empowering our more than 30,000 associates across a global footprint of more than 1,380 retail stores in nearly 70 countries.

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March 05, 2025 16:15 ET (21:15 GMT)