Sadly, the “secret” part of Victoria’s Secret (NYSE:VSCO) this quarter centered not around racy underthings but rather around its earnings report and its guidance. Both of which were flimsier than the $3 lace special. Investors were not at all happy and rushed for the door, leaving Victoria’s Secret with losses approaching double-digit territory in Thursday’s trading.
Both earnings and revenue proved to be a miss for the apparel provider. Earnings came in at $0.28 per share, which missed against the $0.54 analysts were expecting. Revenue came in at $1.41 billion, which sounds great, until two factors are considered: one, analysts were expecting $1.42 billion, and two, that’s down 4.7% against this time last year.
Meanwhile, the guidance was no help either. Victoria’s Secret noted that its net revenue for 2023 was likely to be flat, or possibly up slightly, in the low single-digit range. It also looks for its second quarter 2023 revenues to decrease slightly against the same time the previous year. When asked about the matter, word from the CEO turned to the usual suspect of a “challenging environment,” along with all that it comes with, like declined consumer spending. However, the CEO’s report also noted that the stock has plenty of options for a comeback, including the launch of several new bras and a new customer loyalty program.
Turning to Wall Street, analysts have a Hold consensus rating on VSCO stock based on three Buys, four Holds, and one Sell assigned in the past three months. Further, with an average price target of $30.88, Victoria’s Secret stock offers a 65.53% upside potential for its investors.
