Victoria’s Secret & Co. (“Victoria’s Secret” or the “Company”)
(NYSE: VSCO) today reported 2023 financial results for the third
quarter ended October 28, 2023.
Chief Executive Officer Martin Waters commented
on the third quarter, “We delivered third quarter results within
our guidance range, and we are encouraged by the improving sales
trend as we transition into the all-important holiday season. Our
sales trend in North America continued to improve as planned each
month throughout the third quarter with October being our strongest
month. Our teams have been resiliently focused on what is within
our control and working tirelessly on multiple growth initiatives
designed to create momentum. We are delivering key initiatives such
as our new multi-tender loyalty program, new customer experience
enhancements in our digital business, product improvements and
launches to enhance the Victoria’s Secret brand and accelerate our
beauty business, a reimagined merchandise strategy for our PINK
brand, and the return of our iconic fashion show with the
Victoria’s Secret World Tour ’23.”
Martin continued, “We are excited with early
holiday sales trends in November in North America both in our
stores and through our digital experiences online. The November
sales and margin result was our best monthly performance in nearly
two years and further evidence our initiatives are working, led by
strong response to our holiday, giftable merchandise assortment;
improving customer experiences; and a powerful marketing message
with Mariah Carey, the voice of Christmas. Outside of North
America, our business also has momentum, our footprint is growing
both in stores and online, our partners are performing very well,
and we continue to be excited about performance in China.”
Martin concluded, “With the long-term health of
the business in mind, we are energized by the positive signs in the
business and remain committed to our strategic priorities: 1)
Accelerate Our Core; 2) Ignite Growth; and 3) Transform the
Foundation. At our Investor Day in October, we discussed our key
focus on accelerating our core, and our initiatives designed to
leverage our market leadership position and unlock our opportunity
to convert our significant cultural influence into long-term
financial growth. We believe our evolving strategies will position
the business to deliver the potential of our category-defining
Victoria’s Secret and PINK brands, and I believe we have the right
leadership team in place at the right time for our business to be
successful. We remain confident in our brand repositioning efforts
and are committed to delivering our long-term financial targets and
returning value to our shareholders.”
Third Quarter ResultsThe
Company reported a net loss of $71 million, or $0.92 per diluted
share for the third quarter of 2023. This result compares to net
income of $24 million, or $0.29 per diluted share for the third
quarter of 2022. Third quarter 2023 operating loss was $67 million
compared to operating income of $43 million in the third quarter of
2022.
Excluding the impact of the items described at
the conclusion of this press release, third quarter 2023 adjusted
net loss was $66 million, or $0.86 per diluted share, and adjusted
operating loss was $60 million. These results were within the
previously communicated guidance range for adjusted net loss of
$0.70 to $0.90 per diluted share and adjusted operating loss of $45
million to $65 million. Third quarter 2022 net income was $24
million, or $0.29 per diluted share, and operating income was $43
million.
The Company reported net sales of $1.265 billion
for the third quarter of 2023, a decrease of 4% compared to net
sales of $1.318 billion in the prior year third quarter and at the
midpoint of our previously communicated guidance range of a net
sales decline of 3% to 5%. Total comparable sales for the third
quarter of 2023 decreased 7% compared to the third quarter of
2022.
Adjusted net income (loss) and adjusted
operating income (loss) are non-GAAP financial measures. At the
conclusion of this press release, we have included more information
regarding these non-GAAP financial measures, including a
reconciliation of each non-GAAP financial measure to the most
directly comparable financial measure reported in accordance with
GAAP.
Fourth Quarter and Full Year 2023
OutlookThe Company is forecasting fourth quarter 2023 net
sales to increase in the range of 2% to 4% compared to last year’s
fourth quarter net sales of $2.021 billion. At this forecasted
level of sales, adjusted operating income for the fourth quarter of
2023 is expected to be in the range of $245 million to $285
million. Adjusted net income for the fourth quarter of 2023 is
estimated to be in the range of $2.20 to $2.60 per diluted
share.
The Company is forecasting full year 2023 net
sales to decrease in the range of 2% to 3% compared to last year.
At this forecasted level of sales, adjusted operating income for
the year is expected to be in the range of $290 million to $330
million. Adjusted net income for the full year 2023 is estimated to
be in the range of $1.85 to $2.25 per diluted share.
Forecasted adjusted operating income and
adjusted net income per diluted share for the full year and fourth
quarter 2023 excludes the financial impact of purchase accounting
items related to the Adore Me acquisition, including recognition in
gross profit of purchase accounting fair value adjustments to
acquired inventories as it is sold and expense (income) related to
changes in the estimated fair value of contingent consideration and
performance-based payments, as well as the amortization of
intangible assets. The Company is not able to provide a
reconciliation of forward-looking adjusted operating income or
adjusted net income per diluted share to the most directly
comparable forward-looking GAAP financial measures because the
Company is unable to provide a meaningful or accurate
reconciliation or estimation of certain reconciling items without
unreasonable effort, due to the inherent difficulty in forecasting
the timing of, and quantifying, the various purchase accounting
items that are necessary for such reconciliation.
Victoria’s Secret & Co. will conduct its
third quarter earnings call at 8:00 a.m. Eastern on
Thursday, November 30, 2023. To listen, call 1-800-619-9066
(international dial-in number: 1-212-519-0836); conference ID
5358727. For an audio replay, call 1-800-396-1242 (international
replay number: 1-203-369-3272); conference ID 5358727 or log onto
www.victoriassecretandco.com. The materials accompanying the
earnings call have been posted on the Investors section of the
Company’s website. The audio replay will be available approximately
two hours after the conclusion of the call.
About Victoria’s Secret &
Co. Victoria’s Secret & Co. (NYSE: VSCO) is a
specialty retailer of modern, fashion-inspired collections
including signature bras, panties, lingerie, casual
sleepwear, athleisure and swim, as well as award-winning
prestige fragrances and body care. VS&Co is comprised of
market leading brands, Victoria’s Secret and Victoria’s Secret
PINK, that share a common purpose of inspiring and uplifting our
customers in every stage of their lives, and Adore Me, a
technology-led, digital-first innovative intimates brand serving
women of all sizes and budgets at all phases of life. We are
committed to empowering our more than 30,000 associates across a
global footprint of more than 1,350 retail stores in nearly 70
countries. We provide our customers with products and experiences
that make them feel good inside and out while driving positive
change through the power of our products, platform and
advocacy.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995
We caution that any forward-looking statements
(as such term is defined in the U.S. Private Securities Litigation
Reform Act of 1995) contained in this press release or made by us,
our management, or our spokespeople involve risks and uncertainties
and are subject to change based on various factors, many of which
are beyond our control. Accordingly, our future performance and
financial results may differ materially from those expressed or
implied in any such forward-looking statements, and any future
performance or financial results expressed or implied by such
forward-looking statements are not guarantees of future
performance. Forward-looking statements include, without
limitation, statements regarding our future operating results, the
implementation and impact of our strategic plans, and our ability
to meet environmental, social, and governance goals. Words such as
“estimate,” “commit,” “will,” “target,” “goal,” “project,” “plan,”
“believe,” “seek,” “strive,” “expect,” “anticipate,” “intend,”
“potential” and any similar expressions are intended to identify
forward-looking statements. Risks associated with the following
factors, among others, could affect our financial performance and
cause actual results to differ materially from those expressed or
implied in any forward-looking statements:
- the spin-off from Bath & Body
Works, Inc. (f/k/a L Brands, Inc.) may not be tax-free for U.S.
federal income tax purposes;
- we may not realize all of the
expected benefits of the spin-off;
- general economic conditions,
inflation, and changes in consumer confidence, and consumer
spending patterns;
- market disruptions including
pandemics or significant health hazards, severe weather conditions,
natural disasters, terrorist activities, financial crises,
political crises or other major events, or the prospect of these
events;
- difficulties arising from turnover
in company leadership or other key positions;
- our ability to attract, develop and
retain qualified associates and manage labor-related costs;
- our dependence on mall traffic and
the availability of suitable store locations on appropriate
terms;
- our ability to successfully operate
and expand internationally and related risks;
- our independent franchise, license,
wholesale and joint venture partners;
- our direct channel business;
- our ability to protect our
reputation and the image of our brands;
- our ability to attract customers
with marketing, advertising and promotional programs;
- the highly competitive nature of
the retail industry and the segments in which we operate;
- consumer acceptance of our products
and our ability to manage the life cycle of our brands, keep up
with fashion trends, develop new merchandise and launch new product
lines successfully;
- our ability to realize the
potential benefits and synergies sought with the acquisition of
AdoreMe, Inc.;
- our ability to incorporate artificial intelligence into our
business operations successfully and ethically while effectively
managing the associated risks;
- our ability to source, distribute
and sell goods and materials on a global basis, including risks
related to:
- political instability,
environmental hazards or natural disasters;
- significant health hazards or
pandemics;
- legal and regulatory matters;
- delays or disruptions in shipping
and transportation and related pricing impacts; and
- disruption due to labor
disputes;
- our geographic concentration of
vendor and distribution facilities in central Ohio and Southeast
Asia;
- the ability of our vendors to
deliver products in a timely manner, meet quality standards and
comply with applicable laws and regulations;
- fluctuations in freight, product
input and energy costs, including those caused by inflation;
- our and our third-party service
providers’ ability to implement and maintain information technology
systems and to protect associated data and system
availability;
- our ability to maintain the
security of customer, associate, third-party and company
information;
- stock price volatility;
- shareholder activism matters;
- our ability to maintain our credit
rating;
- our ability to comply with
regulatory requirements; and
- legal, tax, trade and other
regulatory matters.
Except as may be required by law, we assume no
obligation and do not intend to make publicly available any update
or other revisions to any of the forward-looking statements
contained in this press release to reflect circumstances existing
after the date of this press release or to reflect the occurrence
of future events, even if experience or future events make it clear
that any expected results expressed or implied by those
forward-looking statements will not be realized. Additional
information regarding these and other factors can be found in “Item
1A. Risk Factors” in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 17, 2023.
For further information, please contact:
Victoria’s Secret & Co.:
Investor Relations: |
Media Relations: |
Kevin Wynk |
Brooke Wilson |
investorrelations@victoria.com |
communications@victoria.com |
Total Sales (Millions):
|
ThirdQuarter2023 |
|
ThirdQuarter2022 |
|
%Inc/(Dec) |
|
Year-to-Date2023 |
|
Year-to-Date2022 |
|
%Inc/(Dec) |
|
|
|
|
|
|
|
|
|
|
|
|
Stores – North America1 |
$ |
723.0 |
|
$ |
812.7 |
|
(11.0 |
%) |
|
$ |
2,326.0 |
|
$ |
2,712.1 |
|
(14.2 |
%) |
Direct1 |
|
382.5 |
|
|
341.9 |
|
11.9 |
% |
|
|
1,280.8 |
|
|
1,176.1 |
|
8.9 |
% |
International2 |
|
159.6 |
|
|
163.5 |
|
(2.4 |
%) |
|
|
492.5 |
|
|
434.9 |
|
13.2 |
% |
Total |
$ |
1,265.1 |
|
$ |
1,318.1 |
|
(4.0 |
%) |
|
$ |
4,099.3 |
|
$ |
4,323.1 |
|
(5.2 |
%) |
1 – Results in 2023 include Adore Me sales.2 – Results include
consolidated joint venture sales in China, royalties associated
with franchised stores and wholesale sales.
Comparable Sales Increase (Decrease):
|
ThirdQuarter2023 |
|
ThirdQuarter2022 |
|
Year-to-Date2023 |
|
Year-to-Date2022 |
|
|
|
|
|
|
|
|
Stores and Direct1 |
(7%) |
|
(11%) |
|
(10%) |
|
(9%) |
Stores Only2 |
(11%) |
|
(10%) |
|
(13%) |
|
(7%) |
NOTE: Please refer to our
filings with the Securities and Exchange Commission for further
discussion regarding our comparable sales calculation.1 – Results
include company-operated stores in the U.S. and Canada,
consolidated joint venture stores in China and direct sales.2 –
Results include company-operated stores in the U.S. and Canada and
consolidated joint venture stores in China.
Total Stores:
|
Stores at 1/28/23 |
Opened |
Closed |
Stores at 10/28/23 |
|
|
|
|
|
Company-Operated: |
|
|
|
|
U.S. |
812 |
12 |
(9) |
815 |
Canada |
25 |
- |
(1) |
24 |
Subtotal
Company-Operated |
837 |
12 |
(10) |
839 |
|
|
|
|
|
China Joint
Venture: |
|
|
|
|
Beauty &
Accessories1 |
39 |
2 |
(6) |
35 |
Full
Assortment |
33 |
2 |
(1) |
34 |
Subtotal China
Joint Venture |
72 |
4 |
(7) |
69 |
|
|
|
|
|
Partner-Operated: |
|
|
|
|
Beauty &
Accessories |
308 |
13 |
(24) |
297 |
Full
Assortment |
135 |
23 |
(9) |
149 |
Subtotal
Partner-Operated |
443 |
36 |
(33) |
446 |
|
|
|
|
|
Adore Me |
6 |
- |
- |
6 |
|
|
|
|
|
Total |
1,358 |
52 |
(50) |
1,360 |
1 – Includes fourteen partner-operated stores at 10/28/23.
|
|
|
|
VICTORIA'S
SECRET & CO. |
CONSOLIDATED
STATEMENTS OF INCOME (LOSS) |
THIRTEEN
WEEKS ENDED OCTOBER 28, 2023 AND OCTOBER 29, 2022 |
(Unaudited) |
(In
thousands except per share amounts) |
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
Net
Sales |
$ |
1,265,087 |
|
|
$ |
1,318,077 |
|
Costs of
Goods Sold, Buying and Occupancy |
|
(837,712 |
) |
|
|
(860,705 |
) |
Gross
Profit |
|
427,375 |
|
|
|
457,372 |
|
General,
Administrative and Store Operating Expenses |
|
(494,495 |
) |
|
|
(414,784 |
) |
Operating
Income (Loss) |
|
(67,120 |
) |
|
|
42,588 |
|
Interest
Expense |
|
(26,305 |
) |
|
|
(15,329 |
) |
Other
Income |
|
331 |
|
|
|
2,383 |
|
Income
(Loss) Before Income Taxes |
|
(93,094 |
) |
|
|
29,642 |
|
Provision
(Benefit) for Income Taxes |
|
(22,422 |
) |
|
|
7,425 |
|
Net Income
(Loss) |
|
(70,672 |
) |
|
|
22,217 |
|
Less: Net
Income (Loss) Attributable to Noncontrolling Interest |
|
512 |
|
|
|
(2,151 |
) |
Net Income
(Loss) Attributable to Victoria's Secret & Co. |
$ |
(71,184 |
) |
|
$ |
24,368 |
|
Net Income
(Loss) Per Diluted Share Attributable to Victoria's Secret &
Co. |
$ |
(0.92 |
) |
|
$ |
0.29 |
|
Weighted
Average Shares Outstanding 1 |
|
77,369 |
|
|
|
82,628 |
|
|
|
|
|
1 - Reported Weighted Average Shares Outstanding in the third
quarter of 2023 reflects basic shares due to the Net Loss. |
|
|
|
|
VICTORIA'S
SECRET & CO. |
CONSOLIDATED
STATEMENTS OF INCOME (LOSS) |
THIRTY-NINE
WEEKS ENDED OCTOBER 28, 2023 AND OCTOBER 29, 2022 |
(Unaudited) |
(In
thousands except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
|
Net Sales |
$ |
4,099,338 |
|
|
$ |
4,323,091 |
|
Costs of Goods Sold, Buying and Occupancy |
(2,682,995 |
) |
|
(2,808,963 |
) |
Gross Profit |
1,416,343 |
|
|
1,514,128 |
|
General, Administrative and Store Operating Expenses |
(1,429,143 |
) |
|
(1,279,906 |
) |
Operating Income (Loss) |
(12,800 |
) |
|
234,222 |
|
Interest Expense |
(72,777 |
) |
|
(40,710 |
) |
Other Income (Loss) |
227 |
|
|
(2,655 |
) |
Income (Loss) Before Income Taxes |
(85,350 |
) |
|
190,857 |
|
Provision (Benefit) for Income Taxes |
(17,618 |
) |
|
25,285 |
|
Net Income (Loss) |
(67,732 |
) |
|
165,572 |
|
Less: Net Income (Loss) Attributable to Noncontrolling
Interest |
4,155 |
|
|
(9,545 |
) |
Net Income (Loss) Attributable to Victoria's Secret & Co. |
$ |
(71,887 |
) |
|
$ |
175,117 |
|
Net Income (Loss) Per Diluted Share Attributable to Victoria's
Secret & Co. |
|
$ |
(0.93 |
) |
|
$ |
2.07 |
|
Weighted Average Shares Outstanding 1 |
77,627 |
|
|
84,659 |
|
|
|
|
|
|
|
|
1 - Reported Weighted Average Shares Outstanding in 2023 reflects
basic shares due to the Net Loss. |
|
|
|
|
|
VICTORIA'S
SECRET & CO. |
NON-GAAP
FINANCIAL INFORMATION |
(Unaudited) |
(In
thousands except per share amounts) |
|
In addition to our
results provided in accordance with GAAP above and throughout this
press release, provided below are non-GAAP financial measures that
present operating income (loss), net income (loss) attributable to
Victoria's Secret & Co. and net income (loss) per diluted share
attributable to Victoria's Secret & Co. on an adjusted basis,
which remove certain special items. We believe that these special
items are not indicative of our ongoing operations due to their
size and nature. The intangible asset amortization excluded from
these non-GAAP financial measures is excluded because the
amortization, unlike the related revenue, is not affected by
operations of any particular period unless an intangible asset
becomes impaired or the estimated useful life of an intangible
asset is revised. We use adjusted financial information as key
performance measures of results of operations for the purpose of
evaluating performance internally. These non-GAAP measurements are
not intended to replace the presentation of our financial results
in accordance with GAAP. Instead, we believe that the presentation
of adjusted financial information provides additional information
to investors to facilitate the comparison of past and present
operations. Further, our definition of adjusted financial
information may differ from similarly titled measures used by other
companies. The table below reconciles the GAAP financial measures
to the non-GAAP financial measures. |
|
|
|
|
|
|
Third Quarter |
|
Year-to-Date |
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
|
Reconciliation of Reported to Adjusted Operating Income
(Loss) |
|
|
|
|
|
|
|
|
|
Reported Operating Income (Loss) - GAAP |
|
$ |
(67,120 |
) |
|
$ |
42,588 |
|
$ |
(12,800 |
) |
|
$ |
234,222 |
|
|
Adore Me Acquisition-related Items (a) |
|
|
574 |
|
|
|
- |
|
|
26,261 |
|
|
|
- |
|
|
Amortization of Intangible Assets (b) |
|
|
6,284 |
|
|
|
- |
|
|
18,852 |
|
|
|
- |
|
|
Restructuring Charges (c) |
|
|
- |
|
|
|
- |
|
|
11,125 |
|
|
|
29,348 |
|
|
Occupancy-related Legal Matter (d) |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
21,679 |
|
|
Adjusted Operating Income (Loss) |
|
$ |
(60,262 |
) |
|
$ |
42,588 |
|
$ |
43,438 |
|
|
$ |
285,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Reported to Adjusted Net Income (Loss)
Attributable to Victoria's Secret & Co. |
|
|
|
|
|
|
|
Reported Net Income (Loss) Attributable to Victoria's Secret &
Co. - GAAP |
|
$ |
(71,184 |
) |
|
$ |
24,368 |
|
$ |
(71,887 |
) |
|
$ |
175,117 |
|
|
Adore Me Acquisition-related Items (a) |
|
|
1,669 |
|
|
|
- |
|
|
29,546 |
|
|
|
- |
|
|
Amortization of Intangible Assets (b) |
|
|
6,284 |
|
|
|
- |
|
|
18,852 |
|
|
|
- |
|
|
Restructuring Charges (c) |
|
|
- |
|
|
|
- |
|
|
11,125 |
|
|
|
29,348 |
|
|
Occupancy-related Legal Matter (d) |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
21,679 |
|
|
Tax Effect of Adjusted Items |
|
|
(3,029 |
) |
|
|
- |
|
|
(13,134 |
) |
|
|
(12,755 |
) |
|
Adjusted Net Income (Loss) Attributable to Victoria's Secret &
Co. |
|
$ |
(66,260 |
) |
|
$ |
24,368 |
|
$ |
(25,498 |
) |
|
$ |
213,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Reported to Adjusted Net Income (Loss) Per Diluted Share
Attributable to Victoria's Secret & Co. |
|
|
|
Reported Net
Income (Loss) Per Diluted Share Attributable to Victoria's Secret
& Co. - GAAP |
|
|
$ |
(0.92 |
) |
|
$ |
0.29 |
|
$ |
(0.93 |
) |
|
$ |
2.07 |
|
|
Adore Me Acquisition-related Items (a) |
|
|
- |
|
|
|
- |
|
|
0.31 |
|
|
|
- |
|
|
Amortization of Intangible Assets (b) |
|
|
0.06 |
|
|
|
- |
|
|
0.18 |
|
|
|
- |
|
|
Restructuring Charges (c) |
|
|
- |
|
|
|
- |
|
|
0.11 |
|
|
|
0.26 |
|
|
Occupancy-related Legal Matter (d) |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
0.19 |
|
|
Adjusted Net Income (Loss) Per Diluted Share Attributable to
Victoria's Secret & Co. |
|
$ |
(0.86 |
) |
|
$ |
0.29 |
|
$ |
(0.33 |
) |
|
$ |
2.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) In the third
quarter of 2023, we recognized a $1.7 million charge ($0.3 million
net of tax of $1.4 million), $6.5 million expense included in costs
of goods sold and $1.1 million expense included in interest
expense, partially offset by $5.9 million income included in
general, administrative and store operating expense, related to the
financial impact of purchase accounting items related to the
acquisition of Adore Me. Year-to-date 2023, we recognized $29.5
million charges ($24.0 million net of tax of $5.5 million), $21.7
million included in costs of goods sold, $4.5 million included in
general, administrative and store operating expense and $3.3
million included in interest expense, related to the financial
impact of purchase accounting items and professional service costs
related to the acquisition of Adore Me. |
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(b) In the third
quarter of 2023, we recognized $6.3 million of amortization expense
($4.7 million net of tax of $1.6 million) included in general,
administrative and store operating expense related to the
acquisition of Adore Me. Year-to-date 2023, we recognized $18.9
million of amortization expense ($14.0 million net of tax of $4.9
million) included in general, administrative and store operating
expense related to the acquisition of Adore Me. |
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(c) In the first
quarter of 2023, we recognized a $11.1 million pre-tax charge ($8.4
million net of tax of $2.7 million), $7.8 million included in
general, administrative and store operating expense and $3.3
million included in buying and occupancy expense, related to
restructuring activities to continue to reorganize and improve our
organizational structure. In the second quarter of 2022, we
recognized a $29.3 million charge ($22.1 million net of tax of $7.2
million), $16.2 million included in general, administrative and
store operating expense and $13.1 million included in buying and
occupancy expense, related to restructuring activities to
reorganize our leadership structure. |
|
(d) In the first
quarter of 2022, we recognized a $21.7 million charge ($16.2
million net of tax of $5.5 million), included in buying and
occupancy expense, related to a legal matter with a landlord
regarding a high-profile store that we surrendered to the landlord
prior to separation. |
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Victoria's Secret (NYSE:VSCO)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Victoria's Secret (NYSE:VSCO)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024