Victoria’s Secret Faces Challenges with Soft Sales Guidance
Struggles in the Lingerie Market
Victoria’s Secret encountered difficulties as it reported soft sales guidance post-mixed fourth-quarter results due to decreasing demand in the lingerie market.
Q1 Forecast and Market Reaction
The company estimated a mid-single-digit decline in net sales for Q1 compared to the previous year, with adjusted operating income expected to range between $10M to $35M. The market reacted negatively, causing the company’s stock to drop by 24% in after-hours trading.
Fourth-Quarter Performance
Victoria’s Secret reported adjusted earnings of $2.58 per diluted share on revenue of $2.08B for the three months ended Feb.3, slightly missing analysts’ estimates. The company’s stock buyback program worth $250 million was announced to help navigate these challenges.
Full-Year Outlook and Analyst Expectations
The company anticipated adjusted operating income of around $250M to $275M for fiscal year 2024 on net sales of about $6.0B. This forecasted decline in low-single digits from the previous year’s performance fell short of analysts’ expectations of $6.18B in net sales.
In conclusion, Victoria’s Secret faces significant headwinds as it tackles the evolving market trends in the lingerie industry. With a strategic focus on enhancing sales and navigating through tough times, the company aims to regain its market position and meet investor expectations.
