Pink Power, Tariff Trouble: Victoria's Secret Battles Flat Sales, Rising Costs

Victoria’s Secret & Co. (NYSE:VSCO) shares are trading higher in the premarket session on Wednesday after the company reported first-quarter results.

The company reported adjusted earnings per share of 9 cents, which is in line with the analyst consensus estimate. Quarterly sales of $1.35 billion (flat year over year) also came in line with the Street view.

Revenues in North America stores fell 1.1% to $721.3 million. International sales jumped 9.3% to $198.4 million.

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Gross profit decreased to $474.225 million, lower than $501.315 million a year ago. Quarterly gross margin slumped 170 basis points year over year to 35.2% from 36.9% in the year-ago period.

“I am pleased with the strength the business demonstrated during the March and April timeframe, which included continued momentum in our powerhouse Beauty business, ongoing strength in PINK apparel, and newness in sport and swim as we reclaim our position as a full lifestyle brand,” said CEO Hillary Super.

The company reported operating income of $20 million compared to $26 million in the year-ago period.

Victoria’s Secret exited the quarter with cash and equivalents worth $138.45 million. Long-Term debt narrowed down to $1.077 billion from $1.119 billion in the year-ago period.

Outlook: Victoria’s Secret has lowered its FY25 adjusted operating income guidance to a range of $270 million to $320 million, down from its prior forecast of $300 million to $350 million. The company also expects an estimated net tariff impact of approximately $50 million for the fiscal year.

Victoria’s Secret reaffirmed its FY2025 sales guidance of $6.20 billion to $6.30 billion, compared with the $6.24 billion consensus estimate.

Victoria’s Secret expects Q2 adjusted earnings per share to range between 0 cents and 15 cents, missing the 30 cents consensus estimate.

The company also forecasts second-quarter sales between $1.38 billion and $1.41 billion, slightly below the $1.42 billion estimate.

Price Action: VSCO shares are trading higher by 2.25% to $22.70 at last check Wednesday.

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