Robert Way
Shares of Victoria’s Secret (NYSE:VSCO) on Thursday surged in extended trading, after the lingerie retailer said it expected a better-than-feared sales decline and higher-than-anticipated adjusted operating income for Q1.
VSCO stock was the among top percentage gainers after hours, advancing 8.3% to $20.14.
In a preliminary report, Victoria’s Secret (VSCO) said it now sees net sales declining by 3% to 4% Y/Y for Q1, compared to an earlier forecast for a fall of 4% to 6%.
Meanwhile, Q1 adjusted operating income is now seen to be $35M to $40M, versus a prior outlook of $10M to $35M. VSCO also anticipates earning 7 cents to 12 cents per share on an adjusted basis. It had earlier guided for a loss of 15 cents to earnings of 10 cents.
“The retail environment in North America remains challenging and the promotional environment was very competitive; however, we experienced improving trends throughout the quarter in both our stores and in our digital business for both the Victoria’s Secret and PINK brands,” top boss Martin Waters said in a statement.
Victoria’s Secret (VSCO) in fiscal 2023 struggled with sluggish demand in the lingerie market, especially in North America. Sales in that geography declined on a Y/Y basis for four consecutive quarters.
“We delivered meaningful newness in merchandise and brand projection during the (first) quarter and our customers responded, particularly in April, which was our strongest of the three months,” Waters said on Thursday.
“In stores, our customer traffic improved noticeably throughout the quarter, and in our digital business, the investments we’ve made to improve the customer experience resulted in digital sales performance outpacing stores,” the chief executive added.
Victoria’s Secret (VSCO) also reaffirmed its previously provided fiscal year 2024 net sales and adjusted operating income guidance.
