Victoria’s Secret earnings drop in "challenging" first quarter

Victoria’s Secret & Co. remains "confident" in its strategic growth plan, despite a 5% decrease in net sales to £1.13 billion ($1.407 billion) for the first quarter ending 29 April 2023.

Whilst sales dropped in North America, international sales grew 18.7% to £126.5 million ($157.1 million).

Net income totalled £805,000 ($1 million), compared to £65 million ($81 million) in Q1 2022.

Looking ahead, Victoria’s Secret has updated its second quarter and full-year forecast to reflect the first quarter results and recent trends in the business.

The company now expects second quarter net sales to decrease in the mid-single digit range. For FY23, net sales are anticipated to be in the range of flat to down low-single digits compared to £5.1 billion ($6.344 billion) last year.

Martin Waters, Victoria’s Secret & Co. CEO, said: “The first quarter continued to be a volatile macro environment for our customers and as the quarter progressed business became more challenging.

"Sales performance was particularly challenging in our core categories where there was significant decline in the overall stores and digital intimates market in North America.

"Our international business continued its stellar growth around the globe with China as a particular bright spot, and our recent acquisition, Adore Me, met our expectations during its first quarter as a part of Victoria’s Secret & Co.

“While the challenging environment is likely to continue for the balance of 2023, we remain steadfast and focused on the three pillars of our long-term strategy: strengthen the core, ignite growth and transform the foundation.

"We recognise we’re on a journey and our brand repositioning efforts will take time, and while the environment creates some turbulence, we remain confident in our repositioning efforts and our strategic plans for growth."

In October 2022, Victoria’s Secret announced its strategic growth plan to  help "strengthen the core, ignite growth and transform the foundation of the business".

At the time, the company said it hopes to grow market share across its key categories of bras, intimates and beauty.

The business also shared its plans to evolve brand positioning to be more inclusive and attract a more loyal customer base, with more emphasis on story telling in stores and on its digital platforms.