Updated 4:47 p.m. ET March 5
Victoria’s Secret & Co. continued to show a little extra oomph in the fourth quarter, breezing past Wall Street’s sales and profit expectations as it focuses on its core businesses.
Hillary Super, chief executive officer, described the quarter as “exceptional” and said the company’s strategic plan was working during a conference call with analysts.
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The company, which owns both Victoria’s Secret and Pink and has 1,420 stores, drove sales up 8 percent to $2.3 billion in the quarter ended Jan. 31. Comparable sales also grew 8 percent.
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While net income tallied $183.6 million, adjusted profits rose by 10.2 percent to $238 million, or $2.77 a diluted share. That was 24 cents better than the $2.53 in EPS analysts projected.
For the full year, operating income hit $403 million despite $85 million in tariff pressure.
“Eighteen months ago, I joined Victoria’s Secret because I saw one of the most compelling transformation opportunities in retail,” Super said, making clear that she feels her vision was sharp.
The former Savage x Fenty executive put in place a four-part plan to rebuild the businesses and offered updates to analysts on Thursday including:
- Efforts to supercharge authority in bras led the company’s business in the category to annual growth for the first time in four years.
- After Pink drifted from its core, Super recommitted to the business and said it now has “a stronger brand definition, growing awareness and relevance and renewed affinity. All of this is showing up in the numbers.” Growth was in the high-single digits in the fourth quarter.
- Victoria’s Secret’s push to fuel growth in beauty led to low-single-digit increases in the fourth quarter and an annual business approaching $1 billion.
- How the brands are presented to the world and their go-to-market strategies have been updated. “We have sharpened our marketing model, shifting investments towards digital and social and leaning into bold entertainment-led creative,” Super said “This is allowing us to tell more brand stories on more platforms and with greater frequency.”
This year, the company is looking for sales to grow to $6.9 billion to $7 billion, compared with $6.6 billion in 2025. That is expected to push operating income to between $430 million and $460 million, up from adjusted operating income of $403 million last year.
While investors took a step back, trading shares of the company down 12.2 percent to $52.71 on Thursday, Guggenheim analyst Simeon Siegel said trader “expectations had run up” before the earnings report.
“Victoria’s Secret posted strong results and offered above-Street guidance,” he said.
The company is also taking a hard look at parts of its business and said it had initiated a “strategic review of DailyLook, a non-core asset” that sends styled boxes of looks to users.
“Acquired through the Adore Me transaction in December 2022, DailyLook has grown rapidly and achieved meaningful scale,” the company said. “As part of VS&Co’s continued focus on its core business, the company is evaluating opportunities to position DailyLook for long-term success.”
That signals the business could be sold soon.
The retailer added that it “continues to assess the Adore Me business and explore opportunities to optimize it within the broader portfolio.”