Victoria’s Secret Is Still a Show-Me Story

At its peak, pajamas and pajamas accounted for a quarter of sales at Victoria’s Secret.


Mike Kemp / In Pictures / Getty Images

It’s been 10 months since Victoria’s Secret VSCO 8.93%

spun off from L Brands and revamped its brand to be more female-oriented. While the message is starting to resonate with consumers and Wall Street analysts, reaching investors will take longer.

On Tuesday, Victoria’s Secret said its total revenue fell 4.5% in the quarter ended April 30, according to its own highest guidance and better than the 5.2% decline seen by the company. Analysts polled by Visible Alpha expected. Chief Executive Officer Martin Waters said on a call with analysts Wednesday that bra and beauty sales have gained momentum, as has international business as countries recover from restrictions related to Covid.

Company executives said during the call, pandemic-time best-selling gowns and pajamas are dwindling as consumers shift spending to outerwear and workwear motion. At its peak, pajamas and pajamas accounted for a quarter of sales at Victoria’s Secret. Clothing accounts for about 40% of sales at PINK, the company’s young women-focused brand.

So far, the Victoria’s Secret makeover seems to be on track. The company has actively launched new, more comprehensive product lines. Last quarter, it launched its largest bra collection in six years in a line of comfort-focused products. Victoria’s Secret has surpassed consensus profit expectations each quarter reported since launch. Mr. Waters said on the call that the brand had “captured” the decline in market share in the bra category after periods of consistent declines.

However, those changes can take some time to show up in obvious ways. The company said it expected sales for the current quarter to be roughly flat from the previous year. At a time when customers are increasingly selective with their discretionary spending, soulmates can lean back on lipsticks or dresses.

And operating margins, which more than halved last quarter from a year earlier, could take time to recover if apparel companies promote more pricing. That seems to be a distinct possibility: Many people – including Victoria’s Secret – have reported increased inventories. The brand’s rollout of the included size is another area of ​​caution after Old Navy missteps.

Right now, Victoria’s Secret’s turnaround story seems to resonate more with analysts of the company than with investors. All analysts polled by FactSet have Victoria’s Secret price targets above $50. Even after surging 8% to about $44.60 Wednesday morning, the company’s stock is still trading well below Wall Street’s average price target of $67.36.

Investors looking for a flash transformation won’t find it at Victoria’s Secret, but promising changes are happening below the surface.

Write letter for Jinjoo Lee at

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Appears on 2nd June 2022, print version called ‘Victoria’s Secret Is Under Wraps.’ Victoria’s Secret Is Still a Show-Me Story

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