On August 28, 2024, Victoria's Secret & Co (VSCO, Financial) released its 8-K filing detailing the financial results for the second quarter ended August 3, 2024. Victoria's Secret & Co is a specialty retailer of lingerie, pajamas, and beauty products with prestige fragrances and body care, serving customers globally through its stores and online channels.
Performance Overview
Victoria's Secret & Co (VSCO, Financial) reported net income of $32 million, or $0.40 per diluted share, for the second quarter of 2024. This result significantly surpasses the analyst estimate of $0.33 per share. However, the company reported net sales of $1.417 billion, slightly above the estimated revenue of $1.406.70 million and a 1% decrease compared to $1.427 billion in the same quarter last year.
Key Financial Achievements
Victoria's Secret & Co (VSCO, Financial) achieved year-over-year quarterly operating income growth for the first time since 2021, with operating income rising to $62 million from $26 million in the second quarter of 2023. This improvement is attributed to better product acceptance, disciplined inventory management, and a decrease in SG&A expenses.
Interim Chief Executive Officer and Chief Financial and Administrative Officer Timothy (TJ) Johnson commented, "Our financial results for the second quarter came in at the high end of expectations and we delivered year-over-year quarterly operating income growth for the first time since 2021."
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $1.417 billion | $1.427 billion |
| Gross Profit | $501 million | $487 million |
| Operating Income | $62 million | $26 million |
| Net Income | $32 million | -$1 million |
| EPS | $0.40 | -$0.02 |
Challenges and Strategic Initiatives
Despite the positive financial results, Victoria's Secret & Co (VSCO, Financial) faces challenges in the consumer environment, which remains pressured economically. The company is focusing on leveraging its market position in intimates and executing multiple initiatives to drive long-term growth. Notably, the company experienced a 3% decrease in total comparable sales for the second quarter of 2024.
TJ Johnson noted, "While we are optimistic about the positive signs we’re seeing in our business, we recognize the consumer environment remains challenging and our customer is pressured economically."
Outlook and Guidance
Victoria's Secret & Co (VSCO, Financial) has raised its full-year 2024 outlook, now forecasting net sales to be down approximately 1%, compared to prior guidance of down low-single digits. Adjusted operating income for fiscal year 2024 is expected to be in the range of $275 million to $300 million, up from the previous guidance of $250 million to $275 million.
For the third quarter of 2024, the company forecasts net sales to increase by low-single digits compared to last year's third-quarter net sales of $1.265 billion. Adjusted operating loss for the third quarter is expected to be in the range of $40 million to $60 million, with an adjusted net loss per share estimated to be between $0.60 and $0.80.
Victoria's Secret & Co (VSCO, Financial) continues to focus on improving its cost structure and driving growth through new product launches and strategic events, including the return of the Victoria’s Secret Fashion Show to kick off the holiday season.
Explore the complete 8-K earnings release (here) from Victoria's Secret & Co for further details.
