(Filed Under wholesale Lingerie News). Victoria’s Secret, which includes Pink, earned $75.213 million on sales of $1.441 billion in the quarter ended October 30, compared to a profit of $143.383 million on sales of $1.353 billion during the same thirteen weeks last year.
CEO Martin Waters admitted during the conference call with analysts that “compared to 2019, sales actually decreased 9%,” but pointed out “that’s reflecting the net closure of about 260 company operated stores since the third quarter of 2019. However, comparable store sales....increased by 4% compared to 2019.”
The company stated that for the “full fiscal year 2021 forecast, based on the actual results for the first three quarters and our fourth quarter guidance, we expect sales of about $6.7 billion to about $6.8 billion, an increase of approximately 25% to 2020 and down about 10% to 2019.” It added that full year “operating income is expected to be in a range of $295 million to $335 million, compared to last year’s result of $388 million. The decrease is primarily driven by this year’s incremental supply chain cost pressures of $100 million and lapping one-time rent abatements of approximately $65 million in last year’s Q4.”
Victoria’s Secret “is forecasting fourth quarter 2021 sales to be in the range of flat to up 3% versus last year’s fourth quarter sales of $2.100 billion and diluted earnings per share to be in the range of $2.35 to $2.65.”
The company stated “our results in the third quarter show broad-based growth across all core categories. These results are particularly meaningful, as they are against a strong result last year and in the wake of significant supply chain pressures this year.” It continued: “all three lines of business, Lingerie, Pink and Beauty, had positive sales and margin comps for the quarter and each had its margin dollar comps outpace sales comps.”
Waters stated, “I am very pleased with our solid third quarter performance which reflects growth in all core categories. Our work to transform our brand, deepen our customer connections and improve our operational fundamentals is gaining positive traction. We continue to improve our merchandise assortment and expand our already strong customer file. I’m proud of the commitment and resilience demonstrated by our teams, who delivered these results in challenging circumstances, and in doing so are demonstrating the power of a healthy culture. We continue to monitor global supply chain issues and believe our close partnerships with our vendors and our work to get ahead of the curve will help mitigate those challenges. Looking ahead, the leadership team and I believe we have the right strategy and a dedicated team focused on driving long-term growth and creating value for our shareholders.”
Victoria’s Secret and Pink continued to close stores in the U.S. According to a chart provided with the quarterly results, which did not break down the stores by label (Victoria’s Secret vs. Pink), there were 846 company lingerie shops in the U.S. at the start of the year, and 807 are expected to remain by the end of 2021. In Canada, there were 25 stores at the start of the year, and the company expects to end the year with 26.
In Greater China the company expects to end the year with 29 full line lingerie shops, up three from the start of 2021. It expects to end the year there with 36 Victoria’s Secret Beauty and Accessories shops, the same number as the start.
Listing a variety of efforts to improve its image, Victoria’s Secret stated it was “pleased with our brand transformation, which highlights diversity and inclusion, and our advocacy progress. Our models are increasingly representing the diversity of our customer population; we continue to roll out size inclusive mannequins to all stores; and we entered into a new exclusive partnership with MINDD, the first bra company engineered for the D+ woman. We also launched the VS Voices Podcast, our new maternity bra, and our first ever Breast Cancer Awareness Month campaign featuring a partnership with Stella McCartney and our new Body by Victoria Mastectomy Bra. We donated sales of the mastectomy bra for the month of October to the Victoria’s Secret Global Fund for Women’s Cancers to accelerate innovation in cancer research for women, by women.” — NM
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