Victoria’s Secret shares surged in premarket trading after the retailer beat quarterly expectations and raised its sales and profit outlook.
Victoria’s Secret shares surged about 40% in premarket trading Tuesday after the lingerie retailer reported a stronger-than-expected fiscal first quarter and raised its full-year outlook.
The results offered a fresh sign that the company’s turnaround under CEO Hillary Super is gaining traction, with Victoria’s Secret citing stronger sales, fewer discounts and lower expected tariff costs. The company said demand improved across its Victoria’s Secret, Pink, beauty, digital, store and international businesses.
For the quarter ended May 2, Victoria’s Secret reported adjusted earnings of 60 cents per share, double the 30 cents analysts expected, according to LSEG. Revenue rose to $1.56 billion, ahead of the $1.52 billion consensus estimate and up about 15% from $1.35 billion a year earlier.
Net income was $47.7 million, or 56 cents per share, compared with a loss of $1.66 million, or 2 cents per share, in the year-ago period. Comparable sales, including stores and e-commerce, grew 13%, topping the 11.4% expected by analysts, according to StreetAccount.
Victoria’s Secret now expects full-year sales of $7.03 billion to $7.13 billion, up from its prior forecast of $6.85 billion to $6.95 billion and above the $6.99 billion analysts expected, according to LSEG. The company also lifted its adjusted operating income forecast to $550 million to $580 million, from an earlier range of $430 million to $460 million.
Chief financial officer Scott Sekella said the higher outlook reflects stronger sales momentum, better leverage on fixed costs and lower tariff rates. The company also projected current-quarter sales of $1.59 billion to $1.62 billion, above analyst expectations of $1.56 billion.
Super told CNBC that growth was broad-based, including double-digit sales increases across major parts of the business and particular strength in bras, a key category for the retailer. She said the company gained market share during the quarter, especially among shoppers ages 18 to 24, while using significantly fewer promotions.
“We are early innings,” Super said, describing the company’s turnaround work and the executive team she has put in place over roughly the past year.
Victoria’s Secret has been trying to reconnect with younger shoppers while rebuilding core categories including bras, beauty and Pink. Super said sales rose across income groups during the quarter, including among customers earning less than $50,000 and those earning more than $200,000 annually, a sign the company sees its recent gains as driven by product demand rather than discounting alone.
The next test will be whether that momentum holds as retailers watch for signs that consumers pull back after the boost from tax refunds fades.
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