Victoria's Secret says year will 'gradually get better' despite wobbly consumer confidence

Dow Jones
06 Mar

MW Victoria's Secret says year will 'gradually get better' despite wobbly consumer confidence

By Bill Peters

'We recognize the macro environment is uncertain and consumer confidence has shifted,' company says

Victoria's Secret & Co. on Wednesday said it expects the year ahead to "gradually get better," despite what it characterized as shaky consumer confidence and sales forecasts that came in below expectations.

Shares were up 2% in after-hours trade.

Victoria's Secret $(VSCO)$ said it expects full fiscal-year sales of $6.2 billion to $6.3 billion, compared with FactSet's forecast for $6.35 billion. For the first quarter, the company forecast $1.3 billion to $1.33 billion in sales, below estimates for $1.39 billion.

"As we begin the new year, we recognize the macro environment is uncertain and consumer confidence has shifted," management said in the company's earnings release. "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 statement added: "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."

For the fourth quarter, Victoria's Secret reported a 5% same-store sales gain, above expectations for 3.8%. Revenue overall rose 1% to $2.11 billion, a bit above estimates for $2.08 billion. Adjusted earnings per share came in at $2.60, above Wall Street's forecasts for $2.30.

Victoria's Secret reported the results after some big leadership changes, as higher costs of living put pressure on clothing demand and weigh on the company's sales and profits. The company has also faced competition from celebrity brands.

In September, Hillary Super came aboard as its new chief executive. In January, Scott Sekella became chief financial officer after the clothing maker's prior CFO announced plans for retirement.

In January, the company also tightened up its outlook for the fourth quarter, sending shares lower. However, Super said that sales momentum in North America continued from the holiday season, helped by new products and its namesake and Pink brands.

"We are experiencing increased levels of traffic to our stores and our digital site which we believe is reflective of our improved merchandise offering and the positive impact of the VS Fashion Show in late October," she said at the time.

"We exited the holiday and our January semi-annual sale in a good inventory position and ready for Valentine's Day and first-quarter selling," she continued.

-Bill Peters

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March 05, 2025 16:44 ET (21:44 GMT)

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