Victoria’s Secret reports Q1 sales decline, comps dive 5%

Victoria’s Secret & Co. reported net sales of $1.359 billion for the first quarter of 2024, a decrease of 3%, on the back of a sales decline in its comparable sales for the three months.

The Reynoldsburg, Ohio-based company said total comparable sales during the quarter ending May 4 decreased 5% compared to the first quarter of 2023.

Due to this underwhelming sales performance, the lingerie giant swung to a net loss of $4 million, or $0.05 per diluted share, compared to net income of $1 million, or $0.01 per diluted share for the first quarter of 2023.

“I am encouraged by our results in the quarter which were at the high-end of our previously announced preliminary results calling for adjusted operating income up to $40 million,” said chief executive officer, Martin Waters. 

Waters said sales in North America improved over the course of the quarter in both physical stores and online for Victoria’s Secret and Pink brands. Meanwhile, the company launched notable new products and marketing efforts, which were well-received by customers, especially in April, the highest performing month of the quarter.

He also noted that despite a tough retail market and heavy competition, the company’s profit margin was better than the previous year due to effective inventory management and strategic promotions.

“In stores, our customer traffic improved noticeably throughout the quarter. In our digital business, the investments we’ve made to improve the customer experience resulted in digital sales performance outpacing stores. Our SG&A rate was favorable to our expectations as we delivered incremental efficiency within our operating model. In addition to improving North America trends, our international business growth continued with net sales increasing in the mid-teens again in the first quarter,” Waters said. 

Looking ahead, the company is forecasting second quarter net sales to decrease in the low-single digit range, compared to last year’s second quarter net sales of $1.427 billion.

The company reaffirmed its full year outlook and 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. Adjusted operating income for fiscal year 2024 is expected to be about $250 million to $275 million.

The American brand announced last month that its annual fashion show, scrapped after 2018 due to sluggish sales and diminishing audiences, will return this fall. The runway show was created in 1995 and was followed by millions worldwide, before viewership dwindled over the years and was criticized as sexist.