Victoria's Secret's Q3 sales figure surpassed the $1.26bn recorded in the corresponding quarter of the previous year and outperformed its initial single-digit growth expectations.
Q3 saw a 3% rise in total comparable sales, marking a significant turnaround from the 7% decrease observed in the same period of the prior year. Its comparable store sales specifically saw a 2% uptick, contrasting sharply with an 11% drop in the third quarter of the previous fiscal year.
Victoria's Secret CEO Hillary Super said: “I am very encouraged by the strength of our third quarter (Q3) business and the positive, early customer response to our holiday merchandise assortments. Our sales performance was well ahead of our expectations, and our best quarterly sales growth since 2021. Our strength for the quarter was broad based across all regions, all channels, all major merchandise categories and importantly all brands - Victoria’s Secret, PINK and Adore Me - were up to last year.
“Our strength in sales and disciplined inventory management translated to strong margins which were up to last year, and our teams continue to be relentless on controlling costs in our business. It was a great quarter for me to have joined the company and a great quarter to be on the VS&Co team.”
Victoria's Secret third quarter FY24 highlights
Victoria's Secret's third quarter revenue was propelled by robust growth across various segments.
North American sales witnessed moderate growth, while international business soared by 24%, signalling the strongest quarterly sales advancement since 2021. This upswing was uniform across all geographical areas, sales channels, key product categories, and brands under the Victoria’s Secret umbrella, including PINK and Adore Me.
From a merchandise standpoint, Victoria’s Secret's beauty segment remains the top performer, with sales increasing in the mid-teens, marking the fifth consecutive quarter of growth and positioning the business well for the holiday season.
Sales in the casual sleep category also saw an increase compared to last year, which is promising given that this is a popular gift category for the fourth quarter. Additionally, the intimates category showed growth, with both bras and knickers experiencing an uptick in sales together for the first time since 2021.
The company reported a narrowed net loss of $56.22m in Q3 FY24, improving upon the $71.18m loss from the same quarter last year. The net loss per diluted share also improved to $0.71 from $0.92 year-over-year.
Operating loss for the period also saw a reduction to $46.67m from $67.12m reported in last year's third quarter.
Meanwhile, gross profit exhibited an 8% climb to $468.28m compared to $427.37m in the prior year.
Full fiscal year 2024 forecast
Looking ahead to the full fiscal year 2024, Victoria's Secret now anticipates net sales to grow by approximately 1% to 2%, revising previous estimates that projected a decline of about 1%. This updated forecast accounts for an extra week in the fourth quarter of 2023 which contributed roughly $80m in net sales.
With this level of projected sales, adjusted operating income is expected to fall between $315m and $345m, favourable compared to earlier forecasts ranging from $275m to $300m.
For the fourth quarter of fiscal year 2024, net sales are predicted to increase by about 2% to 4% relative to the same timeframe in the prior year.
The adjusted operating income for this upcoming quarter is projected within a range of $240m to $270m, with adjusted net income per diluted share estimated between $2.00 and $2.30.
