VS Q4 Profits +5%, Sales +3%

Above: Victoria's Secret stores as of February 3, 2024 including thirteen partner-operated stores.

In the fourth quarter, Victoria’s Secret earned $181.09 million on sales of 2.08 billion, compared to $172.99 million on sales of $2.02 billion in the same quarter last year. In the 53 weeks ended February 3, 2024 the company earned $115.81 million on total sales of $6.18 billion, compared to $348.11 million on sales of $6.34 billion in 2022.

Noting that his team “delivered solid financial results in the all-important holiday quarter,” CEO Martin Waters explained, “sales trends during the quarter were volatile by week, but we were encouraged by the improving quarterly sales trend in North America. We were particularly pleased with our early holiday sales in November and during the peak days and weekends leading up to Christmas, both in our stores and through digital channels, led by strong response to our giftable merchandise assortment, improved customer experiences and marketing messages. Our international business continued its strong performance with sales up 24% in the quarter compared to last year, igniting excitement around our aggressive growth plans to expand our footprint both in stores and online around the world.”

He added that “our fourth quarter gross margin rate exceeded our expectations and increased significantly compared to last year, a positive inflection point driven by disciplined inventory management and cost reductions related to our transform the foundation initiative to modernize our supply chain operating model.”

In the fourth quarter, store sales in North America slipped 3.6%, while direct sales rose 10.1% and Victoria’s Secret’s international business soared 23.8%. For the full year, North American store sales were down 11.0%, while direct sales rose 9.3% and international sales were up 16.1%.

As of February 3, 2024, there were 808 company owned stores in the U.S., down from 812 as of January 28, 2023. During the same period the company closed two stores in Canada, reducing the total to 23. VSCO did not indicate separate counts for Victoria’s Secret and Pink stores. The business continues to operate six Adore Me stores in the U.S.

Looking ahead, Victoria’s Secret is “forecasting 52-week fiscal year 2024 net sales to be about $6.0 billion, or down low-single digits compared to a comparative 52-weeks from fiscal year 2023. At this forecasted level of sales, adjusted operating income for fiscal year 2024 is expected to be about $250 million to $275 million.”

“The company is forecasting first quarter 2024 net sales to decrease mid-single digits compared to last year’s first quarter net sales of $1.407 billion. At this forecasted level of sales, adjusted operating income for the first quarter of 2024 is expected to be in the range of $10 million to $35 million.” ­— NM