Victoria's Secret (VSCO) Q1 2025 earnings summary

Executive summary

• Q1 2024 net sales were $1.359–$1.36 billion, down 3% year-over-year, with comparable sales down 5–8% and North American store sales declining 7–7.2%; international sales grew 15.6–16%.

• Adjusted net income was $9–$9.1 million ($0.12 per share), down from $22 million in Q1 2023; reported net loss was $4 million.

• Gross margin rate improved year-over-year despite a highly promotional North American retail environment.

• Digital sales outperformed stores, and April was the strongest month, driven by new merchandise and brand initiatives.

• The company remains focused on accelerating core business, igniting growth, and transforming its foundation.

Financial highlights

• Adjusted gross profit was $501.3 million (36.9% of sales), up from 35.7–36.5% last year.

• Adjusted operating income was $39.6–$40 million (2.9% of sales), down from $55 million in Q1 2023.

• Adjusted SG&A rate increased to 34.0% of sales; combined SG&A and buying/occupancy costs were slightly down year-over-year.

• Inventory levels were managed well, down 5% compared to last year.

• Capital expenditures for Q1 2024 were $38.5 million, with 2024 guidance at ~$230 million.

Outlook and guidance

• Q2 2024 net sales expected to decrease low-single digits from $1.427–$1.43 billion in Q2 2023; adjusted operating income forecasted at $30–$45 million.

• Full-year 2024 net sales projected at about $6.0 billion, down low-single digits year-over-year; adjusted operating income expected at $250–$275 million.

• Adjusted net income per diluted share guidance for 2024 is $0.05–$0.20.

• Free cash flow forecast for 2024 is $175–$200 million.

• The outlook assumes continued promotional pressure in North America through the first half, with improvement expected in the back half.