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Victoria's Secret (VSCO) Q1 Earnings & Revenues Top Estimates
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Victoria’s Secret & Co. (VSCO - Free Report) posted first-quarter fiscal 2024 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Earnings beat the consensus estimate for the second straight quarter.
In the first quarter, Victoria's Secret saw a steady improvement in sales trends across its physical stores and online platforms in North America. This positive momentum was evident for both the Victoria’s Secret and PINK brands. Despite a tough retail landscape and high competition in promotions, the company successfully increased gross margin rate compared to the previous year by effectively managing inventory and strategically driving customer traffic.
Q1 in Detail
Victoria’s Secret reported adjusted earnings of 12 cents per share, beating the Zacks Consensus Estimate of 11 cents. The figure decreased from 28 cents in the year-ago quarter.
Net sales decreased 3.4% year over year to $1,359.4 million. However, the metric beat the Zacks Consensus Estimate of $1,346 million. The company’s comparable sales declined 5% on a year-over-year basis.
VSCO’s net sales from the Stores – North America channel came in at $729.1 million, down 7.2% year over year. Direct channel’s net sales declined 3.4% to $448.8 million. Net sales from the International channel rose 15.6% to $181.5 million.
Margin & Costs
The gross profit declined 0.2% year over year to $501.3 million. Meanwhile, the gross margin increased 120 basis points to 36.9% in the quarter under review. Cost of sales came in at $858.1 million, down 5.2% year over year.
General, administrative and store operating expenses increased 0.2% to $475.1 million. It incurred interest expenses of $21.7 million, lower than $22.5 million in the prior-year quarter.
Victoria's Secret & Co. Price, Consensus and EPS Surprise
For the second quarter of fiscal 2024, management expects net sales to decline in the low single digit range. It registered net sales of $1.427 billion in the prior-year quarter. Adjusted operating income for the quarter is forecast to fall in the range of $30-$45 million, based on the projected level of sales. It anticipates adjusted net income in the band of 5 cents to 20 cents per share.
The company projects net sales for fiscal 2024 to reach approximately $6 billion, indicating a low-single-digit decrease compared with a year ago. Based on these anticipated sales figures, the adjusted operating income for fiscal 2024 is estimated between $250 million and $275 million.
Shares of this Zacks Rank #3 (Hold) company have soared 26.2% in the past month compared with the industry’s growth of 5.9%.
STRA has a trailing four-quarter earnings surprise of 36.2%, on average. The stock has risen 46.6% in the past year. The Zacks Consensus Estimate for STRA’s 2024 sales and earnings per share indicates an increase of 6.4% and 33.3%, respectively, from the year-ago levels.
Netflix, Inc. (NFLX - Free Report) presently sports a Zacks Rank of 1. NFLX has a trailing four-quarter earnings surprise of 9.3%, on average. The stock has risen 62.7% in the past year.
The consensus estimate for NFLX’s 2024 sales and EPS implies a rise of 14.8% and 52.2%, respectively, from the year-ago levels.
AMC Entertainment Holdings, Inc. (AMC - Free Report) currently carries a Zacks Rank of 2 (Buy). AMC has a trailing four-quarter earnings surprise of 38%, on average. The stock has increased 56.5% in the past month.
The Zacks Consensus Estimate for AMC’s 2024 EPS implies growth of 70.5% from the year-ago level.
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Victoria's Secret (VSCO) Q1 Earnings & Revenues Top Estimates
Victoria’s Secret & Co. (VSCO - Free Report) posted first-quarter fiscal 2024 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. Earnings beat the consensus estimate for the second straight quarter.
In the first quarter, Victoria's Secret saw a steady improvement in sales trends across its physical stores and online platforms in North America. This positive momentum was evident for both the Victoria’s Secret and PINK brands. Despite a tough retail landscape and high competition in promotions, the company successfully increased gross margin rate compared to the previous year by effectively managing inventory and strategically driving customer traffic.
Q1 in Detail
Victoria’s Secret reported adjusted earnings of 12 cents per share, beating the Zacks Consensus Estimate of 11 cents. The figure decreased from 28 cents in the year-ago quarter.
Net sales decreased 3.4% year over year to $1,359.4 million. However, the metric beat the Zacks Consensus Estimate of $1,346 million. The company’s comparable sales declined 5% on a year-over-year basis.
VSCO’s net sales from the Stores – North America channel came in at $729.1 million, down 7.2% year over year. Direct channel’s net sales declined 3.4% to $448.8 million. Net sales from the International channel rose 15.6% to $181.5 million.
Margin & Costs
The gross profit declined 0.2% year over year to $501.3 million. Meanwhile, the gross margin increased 120 basis points to 36.9% in the quarter under review. Cost of sales came in at $858.1 million, down 5.2% year over year.
General, administrative and store operating expenses increased 0.2% to $475.1 million. It incurred interest expenses of $21.7 million, lower than $22.5 million in the prior-year quarter.
Victoria's Secret & Co. Price, Consensus and EPS Surprise
Victoria's Secret & Co. price-consensus-eps-surprise-chart | Victoria's Secret & Co. Quote
Outlook
For the second quarter of fiscal 2024, management expects net sales to decline in the low single digit range. It registered net sales of $1.427 billion in the prior-year quarter. Adjusted operating income for the quarter is forecast to fall in the range of $30-$45 million, based on the projected level of sales. It anticipates adjusted net income in the band of 5 cents to 20 cents per share.
The company projects net sales for fiscal 2024 to reach approximately $6 billion, indicating a low-single-digit decrease compared with a year ago. Based on these anticipated sales figures, the adjusted operating income for fiscal 2024 is estimated between $250 million and $275 million.
Shares of this Zacks Rank #3 (Hold) company have soared 26.2% in the past month compared with the industry’s growth of 5.9%.
Key Picks
Here are some better-ranked stocks from the Consumer Discretionary sector.
Strategic Education, Inc. (STRA - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
STRA has a trailing four-quarter earnings surprise of 36.2%, on average. The stock has risen 46.6% in the past year. The Zacks Consensus Estimate for STRA’s 2024 sales and earnings per share indicates an increase of 6.4% and 33.3%, respectively, from the year-ago levels.
Netflix, Inc. (NFLX - Free Report) presently sports a Zacks Rank of 1. NFLX has a trailing four-quarter earnings surprise of 9.3%, on average. The stock has risen 62.7% in the past year.
The consensus estimate for NFLX’s 2024 sales and EPS implies a rise of 14.8% and 52.2%, respectively, from the year-ago levels.
AMC Entertainment Holdings, Inc. (AMC - Free Report) currently carries a Zacks Rank of 2 (Buy). AMC has a trailing four-quarter earnings surprise of 38%, on average. The stock has increased 56.5% in the past month.
The Zacks Consensus Estimate for AMC’s 2024 EPS implies growth of 70.5% from the year-ago level.