Victoria’s Secret quarterly profit beats Wall Street estimates despite challenging environment

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Shoppers are seen at a mall in Bethesda, Maryland on February 17, 2022.

Mandel Ngan | TAUT | Getty Images

Victoria’s Secret on Tuesday reported quarterly profit that beat Wall Street expectations, but warned the retail environment will continue to be challenging in the second half of this year.

The Ohio-based lingerie retailer noted that it faced “supply chain headwinds” in the three months ended April 30, while catching up on the surge in sales that he had achieved over the period last year thanks to people spending their federal stimulus money.

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“If the stimulus-adjusted first quarter sales trends were to continue for the remainder of the year, it could call into question our ability to deliver full-year operating profit in line with that of last year,” the company said in a press release.

The executives’ comments came as Victoria’s Secret reported sales 4.5% lower than a year ago, but in line with Wall Street estimates. The company noted that benefits from the federal stimulus boosted sales by about $75 million in the same quarter in 2021.

For the most recent quarter, it reported strength in its bras and beauty businesses as its international segment recovered from heavy Covid restrictions.

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Shares of the company rose about 6% in extended trading.

Here’s how Victoria’s Secret fared in its fiscal first quarter compared to what Wall Street expected, based on Refinitiv estimates:

  • Earnings per share: $1.11 adjusted vs 84 cents expected
  • Revenue: $1.48 billion vs $1.48 billion expected

Victoria’s Secret reported net income for the three months ended April 30 of $76.14 million, or 93 cents per share, compared with net income of $174 million, or $1.97 per share, a year earlier.

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Excluding one-time items, it gained $1.11 a share, ahead of the 84 cents analysts were looking for.

Sales fell 4.5% to $1.48 billion from $1.55 billion a year earlier, but that was what analysts were looking for.

For its second fiscal quarter, Victoria’s Secret expects to earn between 95 cents per share and $1.25 per share, on an adjusted basis. Analysts were looking for $1.19 per share.

This story is developing. Please check for updates.

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