Victoria’s Secret & Co.’s third-quarter profit fell on lower sales as its customers continue to pull back on spending. Here’s what you need to know:
EARNINGS: The retailer said profit fell to $24 million, or 29 cents per share, compared with a profit of $75 million, or 81 cents per share, a year ago. Analysts polled by FactSet expected 24 cents per share.
SALES: Victoria’s Secret said sales fell 9% to $1.32 billion. Analysts expected sales of roughly $1.33 billion. Total comparable sales for the third quarter decreased 11%.
WHAT WE WATCHED
— DEMAND: The Reynoldsburg, Ohio-based company said it expects economic headwinds, such as inflation, will continue to weigh on customer spending through the year, which is likely to drive a highly promotional retail environment. Many retailers have reported dwindling consumer spending as inflation and interest rates remain elevated.
— INVENTORY: Victoria’s Secret said it ended the quarter with total inventories of $1.24 billion, up 22% compared to last year. The company cited inventory carryover, as well as strategic inventory decisions, which includes its goal to offer more sizes. Overall, the company said it believes its inventory is positioned well for the holiday season.
— OUTLOOK: Victoria’s Secret guided for fourth-quarter sales to decline in the high single-digit range compared to last year’s revenue of $2.18 billion. Earnings per share are expected to be in the range of $2 to $2.45. Full-year sales are expected to decline 6% to 7% compared to last year’s sales of $6.785 billion. Adjusted per-share earnings for the year are expected to be in the range of $4.50 to $4.95.