Victoria’s Secret Q2 sales up as momentum accelerates under new leadership

Victoria’s Secret welcomed a marginal increase in sales for the second quarter of the financial year, prompting the lingerie giant to raise its full-year outlook.

For the 13-week period ended August 2, the company saw net sales rise 3 percent year-over-year, from 1.417 billion dollars in the year prior to 1.459 billion dollars. This came above previously cited expectations, management noted. Total comparable sales also rose 4 percent.

Sales were particularly strong among the company’s international operations, for which there was a 21.8 percent YoY increase. While stores in North America saw sales rise 3.1 percent, the company’s direct channel dropped 5.5 percent.

Operating income also fell, declining from 41 million dollars to 62 million dollars, while net income came to 16 million dollars, or 20 cents per diluted share, compared to 32 million dollars, or 40 cents per share, reported last year.

Victoria’s Secret noted that figures were impacted by various items, such as the acquisition of Adore Me and the ongoing restructuring of its leadership team. Excluding such items, the company’s operating income amounted to 55 million dollars, above the communicated guidance range.

Full-year outlook raised as Path to Potential strategy rolls out

In light of the more upbeat sales for the quarter, the company said it was raising its full year outlook from its previously cited 6.2 to 6.3 billion dollar mark. Victoria’s Secret is now anticipating full year sales in the region of 6.33 billion to 6.41 billion dollars.

It is further expecting an adjusted operating income in the range of 270 million to 320 million dollars. This includes a net tariff impact of around 100 million dollars, 50 million dollars higher than the previously estimated guidance.

Victoria’s Secret CEO Hillary Super said the results reflected “early progress on our Path to Potential strategy”, which has been “driven by product innovation, newness and evolved storytelling that is connecting with both existing and new customers”.

Scott Sekella, chief financial and operating officer, added that this was the first quarter under the brand’s refreshed leadership team, with their impact “delivering significant momentum as we enter the back half of the year”.

“Although we recognise that the macro economic environment remains uncertain, we are excited about the product newness and customer experiences we have planned for the second half of the year,” Sekella said.