VICTORIA'S SECRET & CO. FORM 10-K

Press release·03/21/2025 20:45:05

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Victoria’s Secret & Co. (VSCO) filed its annual report for the fiscal year ended February 1, 2025. The company reported net sales of $3.8 billion, a 2% increase from the prior year. Gross profit decreased 4% to $1.4 billion, while operating income decreased 14% to $244 million. Net income was $143 million, a 24% decrease from the prior year. The company’s diluted earnings per share (EPS) was $1.83, a 25% decrease from the prior year. As of February 1, 2025, the company had cash and cash equivalents of $1.1 billion and total debt of $1.4 billion. The company’s market value was $1.26 billion as of the last business day of its most recently completed second fiscal quarter.

Victoria’s Secret & Co. Delivers Solid Financial Performance in 2024

Victoria’s Secret & Co., the global leader in intimate apparel, reported strong financial results for the fiscal year 2024, demonstrating progress in its strategic transformation. The company’s net sales, gross profit, operating income, and net income all increased compared to the prior year, despite ongoing macroeconomic challenges.

Financial Highlights

In 2024, Victoria’s Secret & Co. generated net sales of $6.230 billion, up 1% from 2023. This increase was driven by growth in the company’s international and direct channels, which offset a slight decline in North American store sales. Gross profit increased to $2.284 billion, with the gross profit rate rising to 36.7% from 36.3% in the prior year.

Operating income grew to $310 million, up from $246 million in 2023, and the operating income rate increased to 5.0% from 4.0%. Net income attributable to Victoria’s Secret & Co. rose to $165 million, or $2.05 per diluted share, compared to $109 million, or $1.39 per diluted share, in the previous year.

The company’s strong cash flow generation continued, with $425 million in operating cash flows in 2024. Victoria’s Secret & Co. ended the year with $227 million in cash and cash equivalents and no outstanding borrowings on its $750 million asset-based revolving credit facility.

Driving Growth through Strategic Initiatives

Victoria’s Secret & Co. is executing on its “Path to Potential” growth strategy, which is designed to deepen the company’s connection with consumers and drive shareholder value. The strategy focuses on four key priorities:

Recommit to PINK: The company is working to re-establish PINK as a leading lifestyle brand for young women, anchored in intimates but expanding into apparel, accessories, and beauty.
Supercharge Bras: Victoria’s Secret is leveraging its industry-leading expertise in bras to drive innovation, expand its assortment, and strengthen its marketing and customer experience.
Fuel Growth in Lifestyle Categories: The company is accelerating growth in categories such as Beauty, Sport, Lounge, and Swim, building on its strong brand authority and customer demand.
Evolve Brand Projection and Go-To-Market Strategy: Victoria’s Secret is creating stronger differentiation between its Victoria’s Secret and PINK brands, modernizing its brand identities, and enhancing its omnichannel customer experience.

To support the execution of this strategy, the company is also focused on three key enablers: a customer-centric performance culture, an evolved product development process, and an efficient operating model.

Navigating Macroeconomic Challenges

Victoria’s Secret & Co. faced some near-term headwinds and ongoing uncertainty in the macroeconomic environment during 2024, including inflationary pressures and changes in consumer spending patterns. The company has been actively managing these challenges, focusing on what is within its control and delivering on key initiatives to strengthen its brands and operations.

Adore Me Acquisition and Integration

In December 2022, Victoria’s Secret & Co. acquired Adore Me, a technology-driven, digital-first intimates brand. The financial impact of this acquisition, including purchase accounting items and integration costs, was reflected in the company’s 2024 and 2023 results.

Liquidity and Capital Resources

Victoria’s Secret & Co. maintained a strong financial position in 2024, with $227 million in cash and cash equivalents and no outstanding borrowings on its $750 million asset-based revolving credit facility. The company’s debt-to-capitalization ratio improved to 60% from 73% in the prior year.

The company generated $425 million in operating cash flows in 2024 and used its cash to fund capital expenditures of $178 million, primarily related to its store capital program and technology investments. Victoria’s Secret & Co. also made $161 million in payments for deferred and contingent consideration related to the Adore Me acquisition.

Outlook and Future Priorities

Looking ahead, Victoria’s Secret & Co. remains focused on executing its “Path to Potential” growth strategy, which the company believes will allow it to strengthen its core brands, expand into high-potential categories, and evolve its customer engagement. The company is committed to driving long-term, sustainable value for its shareholders through disciplined execution, operational excellence, and a relentless focus on the customer.

Conclusion

Victoria’s Secret & Co. delivered solid financial performance in 2024, demonstrating progress in its strategic transformation. The company’s focus on strengthening its brands, driving innovation, and enhancing its customer experience has positioned it well to navigate the current macroeconomic environment and capitalize on future growth opportunities. Investors can expect Victoria’s Secret & Co. to continue its pursuit of operational excellence and value creation in the years ahead.