Victoria's Secret & Co. (NYSE:VSCO) announced the appointment of Hillary Super as its new Chief Executive Officer, effective September 9, 2024, signaling a fresh leadership era for the intimate apparel company.
Super, who has nearly three decades of retail experience, will succeed Martin Waters (NYSE:WAT) and also join the company's Board of Directors. Timothy Johnson will act as interim CEO until Super's tenure begins.
Super's appointment comes as Victoria's Secret released its preliminary second-quarter financial results, which indicate performance at the top end or above its guidance for sales, adjusted operating income, and adjusted earnings per share.
The company's second-quarter net sales are expected to decline by 1% to 2%, outperforming the anticipated 1% to 3% drop. Adjusted operating income is projected to be between $57 million and $62 million, surpassing the forecasted $30 million to $45 million. Adjusted diluted earnings per share are estimated at $0.34 to $0.39, significantly higher than the previously issued guidance of $0.05 to $0.20.
The leadership transition is part of Victoria's Secret's broader transformation strategy, aiming to accelerate growth in its core business in North America. Super brings a wealth of experience from her recent role as CEO of Savage X Fenty and as Global CEO of Anthropologie Group. Her track record includes anticipating consumer needs and delivering compelling brand experiences.
Commenting on her new role, Super expressed enthusiasm about joining Victoria's Secret, citing the strength of its brands and beauty business as platforms for future growth. Outgoing CEO Waters reflected on the company's achievements during his tenure, including international expansion and improved operational efficiency.
Victoria's Secret's second-quarter improvement was attributed to product launches, like the Victoria's Secret Dream bra collection, and successful marketing events. The company emphasized disciplined inventory management and cost structure improvements as key drivers of its operating income growth.
Victoria's Secret & Company has reported meeting all key financial expectations in their first-quarter 2024 earnings call. Notably, the company saw a sequential improvement in sales trends in North America for both Victoria's Secret and PINK brands, and the intimates market showed significant growth. The international business also performed strongly, with a 16% increase in net sales. While a slight decrease in sales is forecasted for the second quarter, the company remains optimistic about the latter half of the fiscal year, projecting sales to reach around $6 billion.
Moreover, Victoria's Secret maintained its Hold rating with a steady stock price target of $20.00, as confirmed by TD Cowen. The firm highlighted the company's effective introduction of new products in stores and online, and the ongoing transformation strategy focusing on continually refreshing its offerings. Despite the competitive promotional environment in the retail sector, Victoria's Secret's strategy emphasizes a strong connection with its consumer base through new products.
InvestingPro Insights
As Victoria's Secret & Co. (NYSE:VSCO) embraces a new chapter with Hillary Super at the helm, investors and stakeholders are closely monitoring the company's financial health and stock performance. The intimate apparel giant's market capitalization stands at approximately $1.49 billion, reflecting investor sentiment and market conditions.
According to InvestingPro data, Victoria's Secret's current P/E ratio is 13.5, suggesting that the stock may be valued reasonably in comparison to its earnings. This aligns with preliminary financial results indicating strong performance in the second quarter, with sales and adjusted earnings per share at the higher end of or surpassing guidance. The company's P/E ratio adjusted for the last twelve months as of Q1 2025 is slightly higher at 15.03, which could be attributed to the market's expectations of future earnings growth.
InvestingPro Tips reveal that while the stock has experienced significant volatility and a notable decline over the past six months, analysts predict that Victoria's Secret will be profitable this year. In fact, the company has been profitable over the last twelve months. This profitability is a testament to the brand's enduring appeal and the effectiveness of its transformation strategy, which Super is expected to build upon. With 4 additional InvestingPro Tips available, investors can gain further insights into the company's performance and potential investment opportunities.
It's worth noting that Victoria's Secret does not pay dividends, which might influence the investment strategy of income-focused shareholders. However, with a robust gross profit margin of 44.47% in the last twelve months as of Q1 2025, the company demonstrates its ability to maintain profitability amidst market challenges.
For those interested in a deeper dive into Victoria's Secret's financial metrics and strategic positioning, more detailed InvestingPro Tips can be found at https://www.investing.com/pro/VSCO. These tips could provide valuable context for understanding the company's trajectory as it enters a new leadership era.
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