Victoria's Secret reports 6% revenue drop in Q2

Victoria’s Secret & Co. has today reported its financial results for the second quarter ending 30 July 2022, revealing an $81 million drop in net income compared to Q2 2021.

The second quarter results include a pre-tax charge of $29 million, principally severance, related to the previously announced restructuring actions to reorganise, streamline and improve the company's leadership structure. Excluding this special item, adjusted net income was $92 million.

The Ohio-based company said quarterly revenue dipped 6% to ​$1.521 billion, compared to $1.614 billion in the prior year second quarter. The sales result was below the company's published guidance, partially attributed to "decelerated customer traffic trends across the retail environment throughout the quarter."

The Company is forecasting full year 2022 net sales to decrease in the mid to high single digit range compared to last year’s full year net sales of $6.785 billion. At this forecasted level of sales, adjusted operating income is expected to be in the range of $525 million to $575 million.

It expects third quarter 2022 net sales to decrease in the high single digit range compared to last year’s third quarter net sales of $1.441 billion.

Martin Waters, Victoria's Secret CEO, commented, “As we celebrate our first year as an independent, publicly-traded company, I would like to express my deepest appreciation for the hard work and dedication of our team of associates and partners around the world. As a company, we undertook and committed to not simply an evolution, but a revolution of our strategy. We aspired to and are proud to be a different company today, with a new leadership team and a mission to welcome, celebrate, and champion all women.

“We expect customers will continue to be challenged by inflationary and other financial pressures for the balance of 2022, and we have adjusted our inventory position and cost structure accordingly while allowing for continued investment in growth initiatives. We are confident in our ability to navigate and execute in a shifting consumer landscape with our new, optimised leadership structure which allows for greater agility and focus on the customer and growth initiatives.”

Last year, L Brands spun off Victoria's Secret from its group to become a separate company.