Victoria’s Secret narrows Q4 EPS view to $2.05-$2.25 from $2.00-$2.45

Consensus is for Q4 EPS $.4.83. Reaffirms the Q4 sales guidance provided on November 30 which forecasted a net sales decline in the high-single digit range compared to last year’s Q4 net sales of $2.175B. The Company is now forecasting Q4 operating income $245M-$265M, or approximately 12%-13% of sales, compared to its previously communicated guidance of $240M-$290M. The Company now expects net income for the Q4 to be in the range of $2.05-$2.25 per diluted share, compared to its previously communicated guidance range of $2.00-$2.45 per diluted share. All updated and reaffirmed Q4 guidance excludes the financial impact of the recent acquisition of AdoreMe, as well as transaction costs and purchase accounting related to this transaction. CEO Martin Waters commented, "We are pleased to report that we expect to deliver upon our sales and operating targets despite a challenged economic environment for our customers. We were particularly encouraged by our sales performance during peak days and weekends. Despite some significant weather challenges directly before Christmas, our sales to date have trended above plan since benefitting from both regular price merchandise selling and semi-annual sale performance. As expected, the holiday season was highly promotional and we were appropriately aggressive. Our Q4 margins are expected to remain within our range of expectations, our expenses continue to be very well managed, and our inventory levels are trending lower, or favorable, to our original expectations. The teams have executed well and focused on what we can control in this challenging economic environment. We expect to finish FY22 with an operating margin rate in the high-single digits demonstrating the resilience of our model and tremendous efforts of our teams and I could not be prouder of their efforts."