What Happened?
Shares of intimatewear and beauty retailer Victoria’s Secret (NYSE:VSCO) fell 7.9% in the morning session after the company reported weak fourth-quarter results, as its gross margin and full-year revenue guidance fell short of Wall Street's estimates. However, the company exceeded analysts' expectations for revenue, EPS, and adjusted operating income, with comparable sales rising 5%. Looking ahead, full-year revenue guidance suggests limited growth, raising concerns about potential demand softness. Overall, this was a weaker quarter.
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What The Market Is Telling Us
Victoria's Secret’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 32.1% on the news that the company reported weak fourth-quarter results with same-store sales and revenue missing expectations. In addition, its full-year revenue and operating income guidance missed analysts' expectations, with the latter quite a large amount below expectations. On the other hand, gross margin outperformed and led to a narrow EPS beat vs Wall Street's estimates. Overall, this was a pretty poor quarter for Victoria's Secret with the guidance surely dragging shares down.
Victoria's Secret is down 48.5% since the beginning of the year, and at $20.84 per share, it is trading 57.2% below its 52-week high of $48.71 from December 2024. Investors who bought $1,000 worth of Victoria's Secret’s shares at the IPO in July 2021 would now be looking at an investment worth $490.24.
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