Victoria's Secret & Co. Provides First Quarter 2024 Preliminary Results

10
May '24

REYNOLDSBURG, Ohio, May 09, 2024 (GLOBE NEWSWIRE) Victoria’s Secret & Co. (“Victoria’s Secret” or the “Company”) (NYSE: VSCO) today provided preliminary results for the first quarter 2024 ended May 4, 2024. Net sales, adjusted operating income, and adjusted diluted earnings per share for the first quarter are at or above previously issued guidance as highlighted in the table below.

	First Quarter 2024
	Preliminary Results	Guidance

Net Sales	(3%) to (4%)	(4%) to (6%)

Adjusted Operating Income	$35 - $40 million	$10 - $35 million

Adjusted Diluted Earnings Per Share	$0.07 to $0.12	($0.15) to $0.10

Chief Executive Officer Martin Waters commented on the improved first quarter performance, “I am encouraged by our preliminary view of results and the sequential improvement in quarterly sales trends. We delivered meaningful newness in merchandise and brand projection during the quarter and our customers responded, particularly in April, which was our strongest of the three months. The retail environment in North America remains challenging and the promotional environment was very competitive; however, we experienced improving trends throughout the quarter in both our stores and in our digital business for both the Victoria’s Secret and PINK brands. In stores, our customer traffic improved noticeably throughout the quarter, and in our digital business, the investments we’ve made to improve the customer experience resulted in digital sales performance outpacing stores. At the same time, we continue to experience strong growth in our international business as sales increased in the mid-teens again in the first quarter. Our brands are strong around the globe and our partners are executing the strategy at a very high level.”

The Company reaffirms the fiscal year 2024 net sales and adjusted operating income guidance provided on March 6, 2024.

Adjusted operating income and adjusted diluted earnings per share are non-GAAP financial measures. At the conclusion of this press release, we have included more information regarding these non-GAAP financial measures, including a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure reported in accordance with GAAP.

About Victoria’s Secret & Co.
Victoria’s Secret & Co. (NYSE: VSCO) is a specialty retailer of modern, fashion-inspired collections including signature bras, panties, lingerie, casual sleepwear, athleisure and swim, as well as award-winning prestige fragrances and body care. VS&Co is comprised of market leading brands, Victoria’s Secret and Victoria’s Secret PINK, that share a common purpose of supporting women in all they do, and Adore Me, a technology-led, digital first innovative intimates brand serving women of all sizes and budgets at all phases of life. We are committed to empowering our approximately 30,000 associates across a global footprint of more than 1,370 retail stores in nearly 70 countries. We strive to provide the best products to help women express their confidence, sexiness and power and use our platform to celebrate the extraordinary diversity of women’s experiences.


VICTORIA'S SECRET & CO.
NON-GAAP FINANCIAL INFORMATION
(Unaudited)
In addition to our results provided in accordance with GAAP, provided below are non-GAAP financial measures that present operating income and net income per diluted share attributable to Victoria's Secret & Co. on an adjusted basis, which remove certain non-recurring, infrequent or unusual items that we believe are not indicative of the results of our ongoing operations due to their size and nature. The intangible asset amortization excluded from these non-GAAP financial measures is excluded because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. We use adjusted financial information as key performance measures of our results of operations for the purpose of evaluating performance internally. These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Instead, we believe that the presentation of adjusted financial information provides additional information to investors to facilitate the comparison of past and present operations. Further, our definition of non-GAAP financial information may differ from similarly titled measures used by other companies. The table below reconciles the most directly comparable GAAP financial measures to each non-GAAP financial measures.

		First Quarter 2024
Reconciliation of Preliminary Results
Preliminary Operating Income - GAAP		$21 - $26 million
Adore Me Acquisition-related Items (a)		Approximately $8 million
Amortization of Intangible Assets (b)		Approximately $6 million
Preliminary Adjusted Operating Income		$35 - $40 million

Preliminary Net Income (Loss) Per Diluted Share Attributable to Victoria's Secret & Co. - GAAP		($0.10) to ($0.05)
Adore Me Acquisition-related Items (a)		Approximately $0.10
Amortization of Intangible Assets (b)		Approximately $0.06
Preliminary Adjusted Net Income Per Diluted Share Attributable to Victoria's Secret & Co.		$0.07 to $0.12

(a)	In the first quarter of 2024, we recognized an approximately $8 million pre-tax charge (approximately $8 million net of tax), approximately $7 million included in general, administrative and store operating expense and approximately $1 million included in interest expense, related to the financial impact of purchase accounting items related to the acquisition of Adore Me.
(b)	In the first quarter of 2024, we recognized approximately $6 million of amortization expense (approximately $5 million net of tax) included in general, administrative and store operating expense related to the acquisition of Adore Me.