VS: $2M Q1 Loss
- Nick Monjo
- Jun 23
- 4 min read
Victoria’s Secret sales slipped slightly to $1.353 billion for the first quarter compared to sales of $1.359 billion in the first three months of 2024. Total comparable sales for the three months ended May 3 decreased 1%, and “the company reported a net loss of $2 million,” in the period, compared to a “net loss of $4 million” in Q1 2024.
In the conference call, CFO Scott Sekella summarized, “from a brand perspective for the quarter, both Victoria’s Secret and Pink registered a slight year-over-year retail sales decline while Beauty was up low single digits.”
CEO Hillary Super explained, “the February macroeconomic environment presented headwinds as consumer sentiment softened and inflation concerns heightened,” and added “the intimates market continues to be a little bit pressured. I think some of that is about it going to value. Some of that is about a younger consumer interacting with intimates, specifically bras, in a different way.” She admitted: “so we have seen a little bit of a decline in our intimates share this quarter. I would say it’s a tale of two stories: bras versus panties. In bras, I think it’s very much isolated to that February challenging business and that miss at Valentine’s Day that I talked about on the last call. We rebounded in March and April. We had positive business in bras in April.”
Super was enthusiastic about progress with Pink, noting “Pink apparel delivered its third consecutive quarter of positive comps and significant margin and AUR expansion, driven by improved product high emotion storytelling and customer engagement. The team has successfully continued to grow our Pink icon business and introduce new categories such as skirts, dresses and denim, which customers love it.”
Sales for the brand are currently are “significantly below its high, over $1 billion below its high. So there is an incredible amount of runway there. And I think as we start to build out the full lifestyle component, there’s a beauty opportunity in Pink. There’s an accessories opportunity in Pink. There’s an enormous opportunity to regain share in apparel and to maintain our intimates business in that brand. So I see this as our #1 volume opportunity.”
Super also spoke positively about swimwear. “Swim was a growth vehicle in both brands. I would say we were super, super pleased with Pink swim, both in our iconic Pink-branded swim at Pink Break. That’s a lot to say in one mouthful. As well as the Frankies Bikinis collaboration,” which was “great for basket size and customer acquisition.” She continued, “on the VS side, it was definitely a growth story. I think we have learnings there.”
Sports bras were another plus. “VSX bras were up 20% in the quarter, driven by continued standout success of the Knockout Front-Close, which is now our #2 sports bra. Its proprietary bra within a bra technology with exclusive patented design gives her the confidence of a perfect fit and support, seamless comfort and the freedom to move without distraction.” She added, “we are also seeing significant integration of VSX into our off-duty bra wardrobe. The Featherweight Max is a standout in everyday wear with design patented laser-cut perforations for targeted airflow.”
“This focus on comfort and innovation also extends to the broader intimates category, where performance of wireless outpaced total core bras, driven by both basics and fashion. Our So Obsessed wireless bra is a standout, driving 30% year-over-year growth boosted by expanded in-store visuals and deep resonance with the millennial customer.” Super revealed that “we know that the younger customer is wearing traditional bras less frequently. She is wearing sports bras, in some cases she’s wearing bra tops. She’s just thinking differently about end use.”
CFO Sekella conceded that “sports bras are lower margin. But when you look at the size of bras versus sports bras, the impact that it’ll have on the total business is kind of minimal.”
Super noted that with panties, in Q1, “it’s a little bit different of a story. Our business was softer throughout the quarter in panties. We were less promotional in panties than a year ago, while our competition was more promotional.” She concluded that although “the intimates business is a little bit softer,” it “continues to be very significant. Our Wear Everywhere bra is our #1 bra and continues to be.”
CFO Sekella noted that “in 2025, we plan to open approximately 16 new stores in North America, mostly in the Store of the Future design and off-mall locations. We estimate approximately 30 to 40 store closures in 2025, which will mostly be consolidations of co-located Victoria’s Secret and Pink stores.” As of May 3, there were 772 U.S. and 23 Canadian Victoria’s Secret and Pink stores operated by the company.
VS is forecasting net sales for the second quarter “to be in the range of $1.380 billion to $1.410 billion compared to last year’s second quarter net sales of $1.417 billion.”
“For the full year, the company is maintaining our forecasted net sales range of $6.2 billion to $6.3 billion. At this forecasted level of net sales, adjusted operating income for fiscal year 2025 is now expected to be in the range of $270 million to $320 million, compared to our previous guidance range of $300 million to $350 million.”
The full transcript can be found here: https://seekingalpha.com/article/4794133-victorias-secret-and-co-vsco-q1-2025-earnings-call-transcript.
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