COLUMBUS, Ohio (COLUMBUS BUSINESS FIRST)–Victoria’s Secret is getting its confidence back.
“All around the business we’re seeing positive proof points,” CEO Martin Waters said during a Thursday morning call with stock analysts.
Customer count is growing, daily sales are good, the reopening of its 5th Avenue flagship in New York was successful and its recent new bra launch — the first in some time — is exceeding expectations.
Waters said Victoria’s Secret is first and foremost a bra company. That’s an area where it lost the most sales in recent years, so seeing that turn is notable, he said.
After several years of struggle, sales continue to rebound.
The Columbus-based retailer Wednesday reported quarterly sales of $1.61 billion, up from the $1.06 billion in the second quarter of 2020, which was the peak of Covid-19 pandemic shutdowns and constraints.
That there was a gain on that rough period of 2020 is no surprise, but the business also saw a 5% same-store sales increase over the same period in 2019. Total sales were down 10% versus second quarter 2019, but the company had 240 more stores two years ago than it does today, making the comparable store sales increase noteworthy.
Waters said it was the most profitable spring the brand has seen in five years.
The results were the last quarter the brand spent as part of L Brands. As of Aug. 3 Victoria’s Secret & Co. is a standalone public company.
Waters said the new bra launch pipeline is filled 24 months out. The company launched its first maternity product and despite not promoting it still sold 100,000 units in its first week.
The Live, Flow, Sweat activewear collection also is generating good early returns. That’s also one of the first campaigns with its new VS Collective, this one featuring skier Eileen Gu.
Though there are a lot of positives for Victoria’s Secret, there is a looming potential negative.
The the supply chain, which involves shipping from Asia, remains constrained.
What’s that mean for Victoria’s Secret? It won’t be able to be as flexible with its inventory heading into the all important holiday season as it typically would like to be. In normal times about half the inventory would be ordered ahead with the remainder ordered as sales trends develop — push more into hot sellers, pull back from merchandise that isn’t moving.
This year it’ll be ordering more up front to protect against potential shortages.
“We’re just going to have to place our bets early,” Waters said.
The company is forecasting a sales increase in the third quarter of mid- to high-single digits, but is not providing fourth-quarter guidance given the uncertainty in the retail world.
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