Victoria’s Secret reports loss, net sales drop 6 percent

Victoria’s Secret & Co. reported a net loss of 1 million dollars or 2 cents per diluted share for the second quarter of 2023 compared to net income of 70 million dollars or 83 cents per diluted share.

Operating income for the quarter was 26 million dollars compared to 98 million dollars in the second quarter of 2022.

The company’s net sales were 1.427 billion dollars, a decrease of 6 percent, while total comparable sales decreased 11 percent compared to the second quarter of 2022.

Q3 sales to decrease, according to forecast

Commenting on the trading performance, the company’s chief executive officer Martin Waters said: “We delivered second quarter sales, adjusted operating income and adjusted diluted earnings per share within our guidance range while the macro environment continues to put pressure on our customer base and our core intimates categories."

“With our second quarter results in-line with our guidance, our outlook calls for improving sales trends throughout the fall season. We entered the third quarter with relatively lean inventory levels, and I am encouraged by August sales trends which were better than July, second quarter and the entirety of the spring season,” added Martin.

Adjusted net income was 19 million dollars or 24 cents per diluted share and adjusted operating income was 49 million dollars, which were near the midpoint of the previously communicated guidance range for adjusted net income of 10 cents to 40 cents per diluted share and adjusted operating income of 35 million dollars to 65 million dollars.

The company is forecasting third quarter net sales to decrease in the low to mid-single digit range. At this forecasted level of sales, adjusted operating loss is expected to be in the range of 45 million dollars to 75 million dollars and adjusted net loss is estimated to be in the range of 70 cents to 1 dollar per diluted share.

The company is forecasting full year net sales to decrease in the low-single digit range compared to last year and adjusted operating income rate to be in the range of 5 percent to 6 percent of net sales, consistent with the current analyst consensus estimate which reflects a net sales decrease of approximately 2 percent and an adjusted operating income rate of approximately 5.5 percent of net sales.