Victoria’s Secret Stock In Focus Ahead of Q3 Earnings: Retail’s Bullish

Victoria’s Secret & Co. stock was slightly down ahead of the lingerie and beauty products retailer’s third-quarter earnings, with retail sentiment staying bullish.

Wall Street analysts are expecting earnings per share of -$0.62 on estimated revenues of $1.29 billion, according to Stocktwits data.

Retail sentiment on the stock improved to ‘bullish’ (59/100) from ‘extremely bearish’ (13/100) a day ago. Message volumes climbed to ‘extremely high’ from ‘high’ zone.

For the second quarter, the company reported net income of $32 million, or $0.40 per diluted share. It had posted a net loss of $1 million, or $0.02 per diluted share for the second quarter of 2023.

Second quarter 2024 operating income was $62 million compared to $26 million from a year ago.

The company previously raised its full-year outlook, forecasting net sales to be down about 1%, compared to prior guidance of sales dipping by low-single digits, to a comparative 52 weeks from fiscal year 2023.

In November, Telsey Advisory Group revised its outlook on Victoria's Secret, raising the price target to $40 from $27, and retained a ‘Market Perform’ rating. The revision came in response to the appointment of the company’s new CEO Hillary Super in September.

Several analysts revised their price targets at the same time, citing Super’s experience in the industry and her potential impact on the brand’s future, along with the return of the company’s famed fashion show.

Former interim CEO and Chief Financial and Administrative Officer Timothy (TJ) Johnson, said of the company’s fall collection, “Early customer feedback on our fall assortments is encouraging for both the Victoria’s Secret and PINK brands, and our beauty business has continued solid performance and is driving traffic to our stores.”

The return of Victoria’s Secret Fashion show in autumn was expected to kick off the company’s holiday season. The show was canceled in 2018 after facing much criticism for encouraging ageism and sexism and even being a bit ‘tone-deaf’ to evolving fashion trends.

Victoria’s Secret stock is up 61% year-to-date.

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