Victoria’s Secret reported a quarterly profit that topped Wall Street expectations on Tuesday, but warned that the retail environment will continue to be challenging into the second half of this year.
The Ohio-based lingerie retailer noted that it faced “supply chain headwinds” in the three-month period ended April 30 while also lapping the sales bump it got in the year-ago period from people spending their federal stimulus money.
“If the first quarter sales trends adjusted for stimulus were to continue for the balance of the year, it could challenge our ability to deliver full year operating income in line with last year,” the company said in a press release.
The comments from executives came as Victoria’s Secret reported sales that were 4.5% lower than a year ago, but in line with Wall Street estimates. The company noted that federal stimulus benefits lifted sales by about $75 million in the same quarter in 2021.
For the most recent quarter, it reported strength in its bras and beauty businesses, as its international segment recovered from heavy Covid restrictions.
The company’s shares rose around 6% in extended trading.
Here’s how Victoria’s Secret did in its fiscal first quarter compared with what Wall Street was expecting, based on Refinitiv estimates:
Earnings per share: $1.11 adjustedvs 84 cents expectedRevenue: $1.48 billion vs. $1.48 billion expected
Victoria’s Secret reported net income for the three-month period ended April 30 of $76.14 million, or 93 cents per share, compared with net income of $174 million, or $1.97 per share, a year earlier.
Excluding one-time items, it earned $1.11 per share, ahead of the 84 cents that analysts had been looking for.
Sales fell 4.5% to $1.48 billion from $1.55 billion a year earlier, but that was in line with what analysts were looking for.
For its fiscal second quarter, Victoria’s Secret expects to earn between 95 cents per share to $1.25 a share, on an adjusted basis. Analysts were looking for $1.19 per share.
This story is developing. Please check back for updates.