Proactive Investors - Victoria's Secret & Co. (NYSE:VSCO) stock plunged more than 23% in afterhours trade Wednesday after the lingerie retailer disappointed investors with a mixed fourth quarter financial performance and weak sales outlook for 2024.
For 4Q, Victoria’s Secret posted adjusted earnings per share of $2.58 on revenue of $2.08 billion, ahead of profit estimates of $2.46 but slightly missing revenue expectations of $2.09 billion.
“Sales trends during the quarter were volatile by week, but we were encouraged by the improving quarterly sales trend in North America,” CEO Martin Waters commented.
“Our fourth quarter gross margin rate exceeded our expectations and increased significantly compared to last year, a positive inflection point driven by disciplined inventory management and cost reductions related to our transform the foundation initiative to modernize our supply chain operating model.”
For the full year 2023, sales were down 3% year-over-year to $6.18 billion, short of the $6.19 billion expected. But adjusted EPS was $2.27, ahead of expectations of $2.12.
Dragging on the stock was also Victoria’s Secret’s weak sales outlook, with the company projecting 2024 sales of $6 billion compared to estimates of $6.2 billion. It expects full year income in the range of $250 million to $275 million.
First quarter 2024 sales are expected to decrease by mid-single digits from the year-ago quarter’s sales of $1.4 billion, above the 0.5% drop expected by analysts. Income is seen coming in between $10 million and $35 million.
Additionally, the company said it has approved a share repurchase program authorizing the repurchase of up to $250 million of its stock.
Shares of Victoria’s Secret traded down 23.2% at $19.68 shortly after the release of its earnings report.