Victoria’s Secret is the latest retailer to cut its 2022 outlook

By Claudia Assis

Victoria’s Secret stock drops more than 12% after earnings, annual outlook revised

Shares of Victoria’s Secret & Co. fell more than 12% in the extended session on Wednesday after the company reported second-quarter earnings that beat Wall Street expectations, but joined several other retailers in calling to lower sales this year due to inflation-frightened consumers.

Victoria’s Secret (VSCO) said it earned $70 million, or 83 cents per share, in the quarter, compared to $151 million, or $1.71 per share, in the second quarter of 2021. Adjusted for one-time items , the company earned $1.09 per share. to share.

Sales fell 6% to $1.52 billion from $1.61 billion a year ago.

Analysts polled by FactSet had expected the retailer to report adjusted earnings of 95 cents per share on sales of $1.56 billion.

“We expect customers to continue to face inflationary and other financial pressures for the remainder of 2022, and we have adjusted our inventory position and cost structure accordingly while enabling continued investment in initiatives. growth,” chief executive Martin Waters said in a statement. .

Victoria’s Secret became a stand-alone business a year ago.

“We are confident in our ability to navigate and execute in an evolving consumer landscape with our new, optimized leadership structure that enables greater agility and focus on customer and growth initiatives,” the company said.

The retailer said it expects a mid-to-high single-digit percentage decline in sales in 2022, compared to 2021 sales of $6.785 billion.

In March, Victoria’s Secret said it expected 2022 sales to be in the range of flat to low single digits.

The company forecast third-quarter sales to fall by a high single-digit percentage, compared to sales of $1.44 billion in the third quarter of last year.

He estimated earnings were between flat and 25 cents per share, contrasting with earnings of 81 cents per share in the third quarter of last year. Analysts polled by FactSet expect GAAP earnings of 64 cents for the quarter.

Late Tuesday, Nordstrom Inc. (JWN) stock also fell more than 10% in the extended session after the retailer also beat expectations for its second quarter, but called for lower sales and profits for the year.

Inflation fears, low footfall in brick-and-mortar stores and ongoing supply chain issues wreaking havoc on inventory have weighed on retailer stocks in recent months.

-Claudia Sitting


(END) Dow Jones Newswire

08-25-22 0823ET

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