VS Sales, Income Rise

Victoria’s Secret sales and income rose slightly for both the fourth quarter and full year, however the company is projecting sales to be down a bit in the first quarter of 2025, with only a possible slight rise for the full year.

In the fourth quarter net sales rose 1% to $2.106 billion for the 13-week fourth quarter of 2024, compared to “net sales of $2.082 billion for the 14-week fourth quarter of 2023. Total comparable sales for the fourth quarter of 2024 increased 5%.” Net income for the period was $193.9 million compared to $183.5 million in the last three months of 2023.

For the full year 2024, net sales rose 1% to $6.230 billion for the 52-week fiscal year 2024 “compared to net sales of $6.182 billion for the 53-week fiscal year 2023. Total comparable sales for fiscal year 2024 were flat.” Net income jumped to $168.8 million compared to $115.8 million last year.

VS&Co CEO Hillary Super stated “I am pleased with the strength of our fourth quarter holiday results, which saw sales up in both our Victoria’s Secret and Pink brands and our powerhouse beauty business. Sales increased across most major merchandise categories, in our stores and digital channels, and in both our North America and international businesses. We won in the big moments of the quarter and gained more than our fair share of the traffic in the mall and online.”

In the conference call to discuss the results, Super explained “our giftable holiday product assortments driven by sleep and beauty across both brands were big winners, with casual sleep as our top-performing category,” in the recent quarter. “We were excited to see that products that are quintessentially VS, heritage, stripe, and logo all performed well, which I view as an indication of strong brand health. We also had success with shimmer and shine products.”

She continued, “Pink apparel had a significant trend change at the beginning of the fall season and its strong performance continued in Q4. Along with sleep, apparel drove the business during holiday. As you know, we’ve been working to evolve PINK product positioning and we’re starting to see some positive signs of customer acceptance. Both our modern reinventions of iconic heritage pieces and our most feminine styles featuring sparkle and shine were top performers this holiday.”

“In February, we re-imagined our very sexy collection, expanding the iconic franchise to connect with more women. With a broadened range of lift levels, we’re offering a more personalized fit, delivering sexy for everybody.” One example: “the new lightly lined demi, which was designed for women who love glamour, but prefer a more natural lift.” Another: “In what is a highly competitive market, we have leveraged our best at bras positioning to be the authority for on-trend sexy swim that she feels incredible wearing.”

Commenting on the category that has been challenging for the company in previous years, she declared “we are excited about the newness in swim this spring, which includes styles from Pink by Frankies, one of our strategic collaborations that has over-indexed with the Gen Z customer. In our most recent drop, the collaboration also drove almost triple the average acquisition rate versus the core Pink business, a promising indicator as we build our go-forward collab strategy.”

An important tool for capturing fashion hungry shoppers will be to speed up the creation of new styles. “I think this is essential. We are currently on a 52-ish week calendar really anchored in the lead times around bras. We have made progress on having chase calendars to really supplement that in key categories, but I fundamentally believe that apparel should not be on a 52-week calendar. And so we’re looking to drastically reduce that through a raw material strategy, partnering with our vendors, different ways of working in our product development process,” adding that for Pink apparel “we should be going like 26-weeks for that. And that will be a big shift and a big unlock to bring decision-making closer to customer. And I’m very excited about the potential of what that will add to our business.” 

Super emphasized her support for rebuilding the Pink brand, noting “we are working to reclaim our position as a full lifestyle brand anchored in intimates but extending into more apparel, accessories and beauty. We must clarify and elevate the brand by sharpening our identity, thinking and operating as a social-first brand, and treating Pink as the high-potential growth engine that it is. One of the ways we will do that is by creating stronger differentiation between Victoria’s Secret and Pink in everything from product to marketing to experience. Today, the lines between the two brands are blurred. Moving forward, we will ensure that each brand is distinct, but that they complement one another in a single ecosystem.”

“We will elevate Victoria’s Secret as sexy, glamorous, accessible luxury while modernizing Pink’s brand identity and evolving the way we communicate with the customer.” Interestingly, she admitted it would still take significant future research to determine the exact approach for Pink. “We have a good idea of where we’re going, but I think we need to study this customer very carefully before putting that line in the sand.” 

Commenting on her firms position in the market, the Victoria’s Secret CEO said that “third-party data shows that North American intimates market declined slightly this quarter. However, for the second quarter in a row, we outperformed the market, an encouraging sign of our growing strength and momentum. Our studies again this quarter showed that Gen Z is feeling much more positively about our brands, a testament to our focused efforts to engage her.” She added that VS is “the largest intimate apparel company in the world. In North America, we have approximately 20% market share, 25 million active customers, and 38 million loyalty members. We have the second largest brand following in the world on social media, with 88 million followers on Instagram alone.”

Looking ahead, VS “is forecasting net sales for the first quarter of 2025 to be in the range of $1.30 billion to $1.33 billion compared to last year’s first quarter net sales of $1.359 billion. At this forecasted level of net sales, adjusted operating income for the first quarter of 2025 is expected to be in the range of $10 million to $30 million.” VS added, “our forecast assumes that the environment will gradually get better as we move through the year and as we execute on our strategies designed to grow sales in both our North America and international businesses. The company is forecasting fiscal year 2025 net sales to be in the range of $6.2 billion to $6.3 billion compared to net sales of $6.204 billion in fiscal year 2024.”

The full conference call transcript can be found here: https://seekingalpha.com/article/4765287-victorias-secret-and-co-vsco-q4-2024-earnings-call-transcript

Above left, Victoria’s Secret Very Sexy Smooth Lightly Lined Demi Bra, $34.96; and Pink by Frankies Bikinis top and bottom, $34.95 each.