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Victoria's Secret & Co (VSCO) Reports Q3 2023 Earnings Within Guidance; Forecasts Uplift in ...

  • Victoria's Secret & Co (NYSE:VSCO) reported a net loss of $71 million in Q3 2023, within the guidance range.

  • Net sales for Q3 2023 decreased by 4% year-over-year to $1.265 billion.

  • The company forecasts a 2% to 4% increase in net sales for Q4 2023.

  • Adjusted net income for the full year 2023 is estimated to be in the range of $1.85 to $2.25 per diluted share.

On November 29, 2023, Victoria's Secret & Co (NYSE:VSCO) released its 8-K filing, disclosing its financial results for the third quarter ended October 28, 2023. The company reported a net loss of $71 million, or $0.92 per diluted share, compared to a net income of $24 million, or $0.29 per diluted share, in the third quarter of 2022. The adjusted net loss was $66 million, or $0.86 per diluted share, aligning with the previously communicated guidance range.

Financial Performance Overview

Victoria's Secret & Co (NYSE:VSCO) experienced a decline in net sales by 4% to $1.265 billion in Q3 2023 from $1.318 billion in the prior year's quarter. The company's total comparable sales decreased by 7% compared to the third quarter of 2022. Despite the downturn, the company's CEO, Martin Waters, remains optimistic, citing improving sales trends and the successful launch of growth initiatives such as a new loyalty program, digital enhancements, and product launches.

Income Statement Highlights

The income statement reveals that the gross profit for Q3 2023 was $427.4 million, a decrease from $457.4 million in Q3 2022. Operating loss for the quarter was $67 million, a significant shift from an operating income of $43 million in the same quarter last year. Interest expenses increased to $26.3 million from $15.3 million year-over-year, further impacting the company's profitability.

Balance Sheet and Cash Flow Insights

While the earnings release does not provide a detailed balance sheet or cash flow statement, the reported figures indicate that Victoria's Secret & Co (NYSE:VSCO) is navigating through a challenging period with a focus on strategic initiatives to bolster its financial position in the long term.

Forward-Looking Projections

Looking ahead, Victoria's Secret & Co (NYSE:VSCO) forecasts a positive shift in the fourth quarter of 2023, with net sales expected to increase by 2% to 4%. The anticipated adjusted operating income for Q4 is projected to be between $245 million and $285 million, and adjusted net income is estimated to be in the range of $2.20 to $2.60 per diluted share.

Strategic Initiatives and Market Positioning

CEO Martin Waters emphasized the company's strategic priorities, which include accelerating the core business, igniting growth, and transforming the foundation. The company's leadership is confident in the brand repositioning efforts and is committed to delivering long-term financial targets and shareholder value.

Conclusion

Despite the reported net loss and sales decline in Q3 2023, Victoria's Secret & Co (NYSE:VSCO) is showing signs of a turnaround with positive sales trends in November and a strong outlook for the holiday season. The company's strategic initiatives and focus on enhancing customer experiences and product offerings are expected to drive growth and improve financial performance in the upcoming quarters.

For more detailed information, investors and interested parties can listen to the earnings call scheduled for November 30, 2023, or access the accompanying materials on the company's investor relations website.

Explore the complete 8-K earnings release (here) from Victoria's Secret & Co for further details.

This article first appeared on GuruFocus.

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