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Shares of Victoria’s Secret & Co. fell more than 7% in after-hours trading Wednesday after the retailer reported quarterly sales that fell short of expectations, even though it said it ran fewer sales, in its first earnings report as a standalone company.
Victoria’s Secret
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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.
With tighter inventories, Victoria’s Secret ran fewer promotions, resulting in rising margins, Chief Executive Martin Waters said in a statement. The company had its “most profitable spring season in five years,” he said.
“Our vital signs are strong and, with our exceptional leadership and associate teams, I continue to be confident in our long-term growth in all channels,” Waters said.
Online sales for the second quarter fell 24% compared with same period in 2020 and rose 26% compared to 2019.
Shares of Victoria’s Secret have soared since the company’s stock began trading in early August. The separation from parent L Brands, long in the works, was completed earlier this month.
Victoria’s Secret joined the S&P 400 Midcap Index
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in early August.
The company guided for third-quarter 2021 sales to increase by mid- to high-single digits versus last year’s third-quarter sales of $1.35 billion and EPS in a range between 60 cents and 70 cents. The company said that due to “continued uncertainty” it is not providing financial guidance for the fourth quarter.
