Victoria’s Secret reports disappointing sales in Q2

Victoria’s Secret & Co. (NYSE: VSCO) is scheduled to announce its second-quarter results on August 18 after the market close. In its first financial report, Victoria’s Secret said it earned $151.1 million, or $1.71 a share, in the second quarter, contrasting with a loss of $199.5 million, or $2.26 a share, in the year-ago period.

Net sales rose to $1.61 billion, from $1.07 billion a year ago. Second-quarter 2021 sales were down 10% from sales of $1.79 billion in the second quarter of 2019 and reflect a net closure of 240 company-operated stores since the second quarter of 2019, the company said.

Analysts polled by FactSet expected Victoria’s Secret to report EPS of $1.59 a share on sales of $1.69 billion.

Here’s what the company expect for the Q2   

Victoria Secret Segment Sales – $1.1 billion  
Estimated Adjusted Operating Income – $ 200+ million 

Earnings History 

The American lingerie, clothing, and beauty retailer reported improved sales in the first quarter and made a strong comeback after years of declining sales. For the first quarter, comparable sales grew 9% compared to 2019, and direct sales increased 44% to $520.9 million. In Victoria’s Secret international, first-quarter sales was up $28.4 million compared to 2020. The operating loss was down by approximately $40 million to about breakeven. 

 The total Victoria’s Secret segment gross margin rate increased over 1,100 basis points compared to 2019, mainly driven by a significant increase in the merchandise margin rate. The company’s operating income accounted for $244.5 million, an increase of $501.5 million compared to last year’s corresponding period. 

For the full year 2020, the global net sales amounted to approximately $ 5.4 billion. On August 2, Victoria’s Secret parent L Brands (NYSE: LB) completed the separation of Victoria’s Secret business into an independent, public company through a tax-free spin-off to L Brands shareholders. Meanwhile, L Brand has been renamed Bath & Body Works Inc., with the stock ticker going from “LB” to “BBWI.” Victoria’s Secret includes Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty.  

Victoria’s Secret shares began trading on NYSE under the ticker symbol “VSCO” from August 3. The retailer recently launched its first products since it rebranded. The new VS Collective program features women known for their career achievements and influential voices in the community.  

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