Victoria's Secret Reports 7% Net Sales Increase in Q3 2024

Victoria's Secret & Co. reported a net sales increase of 7% for the third quarter of 2024, reaching $1.347 billion compared to $1.265 billion in the same period last year. The company's gross profit also rose to $468 million, up from $427 million, resulting in a gross profit margin of 34.8%, an improvement from 33.8% in the prior year. However, the company recorded an operating loss of $47 million, which, while an improvement from the $67 million loss in the third quarter of 2023, still reflects ongoing challenges in the retail environment. The net loss attributable to Victoria's Secret was $56 million, or $0.71 per diluted share, compared to a net loss of $71 million, or $0.92 per diluted share, in the previous year.

In terms of year-to-date performance, Victoria's Secret reported net sales of $4.124 billion, a slight increase from $4.099 billion in the same period last year. The North American store sales decreased by 3% to $2.267 billion, while direct channel sales increased by 1% to $1.290 billion. International sales saw a notable increase of 15%, totaling $567 million. The company’s operating income for the year-to-date period was $42 million, a significant turnaround from an operating loss of $13 million in the previous year.

Strategically, the company has made significant executive leadership changes, including the appointment of a new Chief Executive Officer, Hillary Super, and the elimination of two executive officer roles to streamline operations. These changes are part of a broader restructuring initiative aimed at improving organizational efficiency. Additionally, the company continues to integrate its acquisition of Adore Me, which is expected to enhance its product offerings and market reach.

Operationally, Victoria's Secret has approximately 890 stores across the U.S., Canada, and China, with over 490 additional stores in nearly 70 countries through franchise and wholesale arrangements. The company reported a total of 79 million shares outstanding as of November 2, 2024. The filing indicates that the company is focused on optimizing performance and is committed to its strategic priorities, which include accelerating core business growth and transforming its operational foundation.

Looking ahead, Victoria's Secret remains cautious about market conditions, including inflation and changes in consumer spending patterns. The company is committed to maintaining adequate liquidity and plans to utilize cash flows to invest in its brands and repay debt. The management expressed confidence in its strategic direction and aims to deliver long-term sustainable value for shareholders, despite the challenges faced in the retail sector.