VSCO - Earnings call transcript Q1 2022

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Operator

Good morning. My name is Madison, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Victoria's Secret & Company’s First Quarter 2022 Earnings Conference Call. Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to Mr. Investor Victoria's President, & Vice Ware, Relations Secret at Company. Jason may begin. you Jason,

Jason Ware

Thanks, Victoria's ending welcome First and Madison. morning, Good to Conference for XXXX. Quarter Call Secret the XX, period April Earnings Co.'s &

a filings forward-looking we our and press any safe in of you subject found statement today statements I to our may need As remind matter in that harbor are make to formality, our releases. SEC

Kramer. today call and me CEO, Waters, CFO, the Johnson; Brad Joining Tim EVP, Finance; Martin are on

We are up we answer on adjusted SEC Reconciliations are for press any our release and SEC questions. of also Martin. Thanks. to filings. special the are other release to in these available the our to XX now minutes our the today call to and over today described exclude Certain measures the discuss press results in I'll and items GAAP turn results our and call filings. non-GAAP included And measures most comparable

Martin Waters

morning, last the current and first to to quarter. major Notwithstanding challenging. Jason, initiatives ago, on talked be delivered quarter environment, was during When I'm said we months X good report operating pleased we Thanks, our you going with everyone. that the we

thank to partners and of resilience. Before in, I hard work, we dive want our and their associates all for commitment

income even reflects business. guidance teams to line remained above stronger-than-expected the that's the earnings third navigated adjusted separation was and we've consecutive we in our the adjusted execution, And our federal focused quarter end or enabling year. operating the on high us diluted significant benefits which but Our stabilize left of have headwinds as our This guidance, stimulus and at since to generate supply sales delivered per chain our share. work prior from results

XX-month delivered trailing EBITDA. in we $X a period, the over billion for reminder, As

saw momentum to for restrictions. X.X%. recovered as We beauty in it last and year our international $XX approximately business and from first were to sales flat declined the Sales bra performance. last prior stimulus in million, Turning Adjusted benefit business, quarter in year. of year also our COVID-related

operating of we against delivered Our by our end diluted $X.XX our guidance $X.XX diluted expense $XXX our $X.XX adjusted We range per the and previously to million. first was above goals the share, high share adjusted offset which above all of primarily to plan about. to improvement of quarter made know We income $XX pressures that's communicated $XXX help per that earnings progress profit macroeconomic driven management. is disciplined of of million guidance million

midpoint year, volatility pressures. the As look to our will with we projecting digits, low QX the we the to challenging, first of out. balance stimulus aforementioned line second environment turned quarter macroeconomic be the continue up due to down in be with We're flat there and could low in results some and single the quarter be where and digits sales single to results about expect for to the adjusted

results of the quarter to quarter be which is chain about supply $XXX expect year's last million flat the million costs. to We below with range when million, end $XXX last adjusted in of income high second operating year to for second $XXX

believe of low that and the back the stock in inventory factors plans environment in that remain where to to operating through year, positioning. have the see -- manage should that a and number we lapping was which last half of projected we to in will income half in compared improved in trends, this levels sales opportunities are year full directionally we with us And including back on single year. are are We year to flat disruptions delivering enable result dynamic it last up the line that that of For to improve year. up last place focused experienced inventory we deliver digits

new including of Victoria's and launches, have PINK Secret. both bras We

Beauty. and expansions, we size have We have

new have initiatives, of the our store We future. including

program have to and We also loyalty recovery is say. on track, nicely expanded of the COVID-related Lab in We're last happy I'm Beauty distribution, launch VS&Co planned seeing restrictions our international the from year.

we've developing improvement dollars more will become Additionally, plan pressures. managing expect margin to expense will supply offset are we've year the increase inflationary more proactively and been help -- the and and we these the run business. In will throughout initiatives a rate of headwinds. meaningful and profit chain begin lower And anticipated short, meaningful

year. obviously we this However, that in results our there understand volatility could be

balance stimulus last adjusted year. were So for the first year, full in deliver sales year the operating it our ability that's with for to the to continue quarter of line if trends income challenge could

sustainable heart committed importantly, It the brand the that current steadfast of mid-teens advocate and customer cetera. customers experience, products focusing our operating income performance and create we women how in for celebrated, our that rate long-term things the care, of value for in It's deliver and our comfort beauty, world's with maintain remarks. commitment do. a to and cetera, developing and culture every we creative remain It and representing interaction how as opportunities performance, them. our associates products. change value every we and all Thank leading and push committed in our challenging control, our to our of we et of double could operating care our across the as et desires rate the make stabilized vision We've our how and with believe our are ingenuity in and shareholders. customers concludes track of through each women decision of prepared enhancing we at an in interest, business the our positive and for best income for at digits apply sales to optimizing bras, on you We're our Although represented up listen confident we organization. and craft, the transformation, remain low boundaries skill started women with do over power our We aspirations in environment It's the we to to reflected embedded and and perspectives, being our to putting connect platform. remain on part and and become in to remain in percentage it's we shows in achieve listening, by the time. target

delighted at think be time, I we'd this Jason? questions. take to your

Jason Ware

We Madison. questions can now, take

Operator

from from Our Fargo. Ike first Boruchow question comes Wells

Ike Boruchow

to the lever? Just there during pull of have a you Did ending trend. about inventory initiatives you're quarter, see about to the be the feeling quarter. kind in kind XQ saw activity from beyond? could you Was into kind in the and the quarter and sales how sale happened maybe what we of of QX, guys, exiting plan levels understand should second you pricing in you hoping what talk semi-annual and So trying expecting the promotional to volatility

Martin Waters

go for that question. to We'll Ike. Thanks, Brad Great.

Brad Kramer

inventory the after and can with start the unpack I'll part, try sales to we then that.

back to growth, the the we to manage the So carryover on total year-over-year largest driver of making pressures. higher half inventory inventory strategic drive and have like A a year. things back Happy is for to related times that rate very reflect we're ability things the year future I'd is impact XX% levels represent year-over-year year. by Overall, doesn't longer to, significant inventory like XX%. confident as driven attention decisions topic adjusted ended basis, Amazon, It's from change related last ocean to the to small portion a is less better X/X we've is plans say the run up transit with and that and that business and sustainability. to about size next our supporting Nation we're our expansion The inflationary assortment throughout to rates. the increase paying that of recent transportation shifted close costs quarter the than of modal mix

moderate inventory in well. growth year levels expect of more back in quarter. should the fourth the rates We from as We inventory end an normalized to see the perspective

Martin Waters

also of spring of Yes. the air believe of season, good the year. prior out did job believe I flow. I of as good did perspective, versus I'll think teams inventory the we and we quarter jump move the here, the underline compared And from on Ike, an managing the through is us coming very think the of favorable mix Paul perspective first a job positioning very a to very our ocean We teams in for

us gives more flexibility. it So

Additionally, the a prioritizing feel teams on, also I'll more little and delivery. East timing say, focused delivery that so and have of Coast assuredness we on of delivery comfortable ports

month we the or think in parts should the very I the and last to a managing perspective, of difficult probably done inventory mentioned of start an I to teams was QX more that How other have the on quarter, the difficult think call, I relates sales, say. from situations. February good a question, terms difficult your So job

improved challenges. Valentine's to March was Cloud aspect, and Day were most that April closer unique launch, it's I was the up our got us quarter. retail. the in and think business across and for Love and we the best of challenge we As don't of month a actually picked whether macro

one Clearly, on going the was the some stats the I challenging the focused there most spending. last of think we was where the weather read customer on across to retail shift as country. at years XX-plus her month in was

be So immune we to for going were that. not

an to roughly promotional be last relatively month. all year was a From be margin April came the choppiness standpoint, we challenging on notice, stimulus, that. our So with to with very felt forecast. adjusted you'll in basis line we for good across a the quarter But overall, able flat to about in

the we of that activity inventory the mid-season anything with line sale, that in else. a in the directionally really maintained make to was we of did were things bit part anticipated. but first middle our around path sure glide than run We So quarter, what more sale little

were much we the able manage quarter, to with for pretty margin in our the So expectations. line

Operator

Lorraine America. Hutchinson Our of Bank from question from comes next

Lorraine Hutchinson

a I the environment? on the low then year. improvement How the program? specific wanted included can is much decline double for half? outlook bit to this focus your that of under on you for freight digits back What's EBIT profit initiatives in dependent promotional expense expand And the margin in on a

Martin Waters

I'll of back there on will profit improvement question. the maybe start in and Yes, Lorraine, the some then Brad of half your kick initiatives,

to goal match were goal that not spring. was guidance, off, that, back Lorraine, trying the improve stepping income. that meaningfully the to think year, our we operating operating understand in in I improves communicate the our that first last sales what back year's We than a from performance half from more there's an income expectation year means of the do trends and we're for

looking what is at really of a think couple we're things, I Lorraine.

mentioned. a prior the all year slightly than of would versus the rate margin freight the better where challenges that margin the from that we've down be off, year, expect perspective, spring back for the half we First it's would

back would the that sustainability into move to half of we in some raw the but also we we're of as be year. would relief perspective, a from the put some we're from are a expect trying and on a going to we materials So back perspective, improved in freight year, expect aware focus the what our on product, those the balance, on margin. half aspect margins to But the pressures from

of year. standpoint, profit expense an as expect on Additionally, to some half down From back touch will improvement our or be the Brad initiatives and flat the prior rate the we year, touch to dollars would of on margin.

we the talked some that's in of going prior work call, on the think business. on I our about good

investment or stores to costs then each those lower. investment cost the think going and in take X If initiatives business, people your indirect in of and in big kind areas in organization about of X our and we have to our do try what costs costs buckets, store-related in in our payroll, control you on we

or very at prior a X I delivering dollars plan bit? So expense Brad, public year improvement is feel at rates good side below profit focused do very at prior or a on the on the our year below business the that to the cost touch similar as the plans of want company similar equation. little quarters after on the you

Brad Kramer

targeted opportunities. plans put as additional launch initiatives actions improvement late direct sourcing, Yes. kind experiencing. year Lorraine, on focus profit year opportunity and the had try that At those putting in had card on innovation. expense in by of and of of that Those TJ the side we would of anticipate were of progress done human business. was in price the to against to last kind the business place price actions those extract ups some where are made at elasticity end the year to efficiency year, middle profit more stores, to improvement of those of we we opportunity actions improvement initially help that middle very looking began build those the last credit offset in try last throughout to the in half headwinds areas from we AUR inflationary pleased the referenced, that those plan We go expecting year we plan. on of with the the program that more of actions to the to of the last execute well of lot back after late 'XX, were the and price actions impact newness to And focused look testing a find and we've pockets from We're our capital complemented profit in of meaningfully we year, as a more perspective. co-brand

Operator

JP Morgan. next from question Matthew comes Boss Our from

Matthew Boss

the shifts the just resonate areas this the consumer line out? SG&A in does rank seeing in efficiencies year today? What May progresses? play improvement just elaborate on And in what your you today? you you sales the assortment of inning And Martin, Can these on quick consumer that are categories the TJ. of and flexibility some So with overall improvement much item the say for April as you cited, do back you have maybe product on of not would the and how drivers best half and year if then softer

Martin Waters

question. Thanks, the Great. Matt. Yes. for Thanks

So business. we're in the merchandise

we consumer. based I resonates product us, very that's So and think category our good job have on results And new that we the good bras. generating most with a fundamentally well the in is done important how are to are that

And MPD data decline data. we actually consistent the say that, decline, and delighted of share built showing So within just in bras. the we arrested every share from I'm say about share around where we're market at here that's period to in our day, up best market have periods market latest last

So good. really that's

bras, in like extent, strong lounge of categories to competing So some been good sleep business. in lapping where performance apparel less has Sleep strength celebration are and good with during ware work times kind our think now to stuff. outerwear COVID strength and panty and softer. And and and business, I are that

strength less in and fashion we categories. less comp about So strong in in performance been Victoria's where with has mixed, very less strong XX% feel those but PINK, Swim fit good swim near year-over-year.

to bag. always, mixed responses and been of terrific a Bombshell In incredible So we some of launches to give it's it's an our is listen what Bombshell, a ability the best well. very her Beauty, and consumer reflection as with to we've And wants. fragrance. our it as time have In exactly seen our some other strong that had she

we more industry overall, would positives an and So with in from negatives what expect about perspective. than line TJ?

Tim Johnson

belt think initiatives in identified I the under and those or in early as think our a the through late many to it's Matt, as don't improvement characterize Brad And season. of still quarters next if We're innings. probably part Clearly, question, have least initiatives process. company, initiatives that the currently fall Yes. mentioned, runway with the of profit our of year, your that say expense parts the starting not second stretch as I early XXXX. early being I initiatives a at we've very X would public

in business. the the in There I improve the critical. that are on believe time, line, can but our improve the go business. into Martin flexibility will that there's our new of to continuing sure to that, positioning is step that, do I further. results, of extend the to you're back aligned of the will of work also work and to a of we and a back portion is bottom over business identify improve I very seeing We expense So I or in that that brand think make reinvest And experience initiatives the so take don't even that. to a to the continue certainly portion that the want we're I the and acknowledge brand the margin But reinvested improve the want that ones to we stores to is think that be continue that and health tail to that

balancing the here on, see So current working a least be we through better a part we'll that act next do there's at year with but runway of initiatives.

Operator

Our Siegel next from question from Simeon BMO Markets. comes Capital

Simeon Siegel

are maybe then in you if what were inventories units? margin, view the et transit guys dollars how ex cetera in a Did chain up the maybe and about say there? then And market, what TJ, longer-term opportunity isolating can we longer-term on just you gross take supply inventory were thinking up

Brad Kramer

unit North was transit Simeon, XX in-transit up in in single and point from America a about And business LY. in we're there the perspective digital an perspective, quarter. on a the from impact to TJ? then units, stores inventory digits across low percentage the from

Tim Johnson

Yes. if think some kind And are helpful building into think that when it we term, you of Simeon, season, I your I up challenges. is break be seasonal we longer margins guess, about question, because on more against up might

from in terms the So I a some supply we bit. our of will as do all of come we from expect move prior believe chain bit and the we that a profile into little based continue margin that to on forecasts of back activity say it to fall, year improves because will favorability. stick the us I'd of some the little think would

we we are costs where expect other a into move pressures. in are margins on we I investing balance, margin the material from as get think there But the would alongside underscoring slightly and of raw that, that perspective better to fall. sustainability

product supply obviously, a little bit. the from control a we're today. our price And perspective, ups of abate very facing But kind costs customers. little little chain things on return policies, blocking we've start like the been actioned very that move would to things would we're those supply that, a think our be in at candidly pushback a headwinds and perspective our cost into to perspective against that We've we'll I up cost already help noise and from can of be hopefully, overall, a from or from something the opportunities margin expectation that that doing chain cost terms and we from there, that perspective. the continuing we focus tackling XXXX, looking As of with

we're margins, Simeon, all on So to not at totally but blocking aspects continuing being overall initiatives. looking at just chain, then look tackling price of I some and dependent supply think and cost

Additionally, I co-brand the from already, margin co-branded as up item card, we've think the credit show benefits credit other card likely that the mentioned in well.

a we've on. different that So of levers I think got number we're working

Operator

Our next Telsey comes from Dana from question Group. Telsey

Dana Telsey

a store the store you this about future, how and the planning little performing and what sales in how saw Can talk of quarter bit and digital forward? going you're you it's

Jason Ware

Martin. Over Dana. Thanks, to

Martin Waters

hear Good Yes. Thanks, Dana. you. to from

the Store doors. So of early Future is very

As X Store plus we of in XX will We the renovations XX have you know, Future. to this of style year stores have plan that the be open.

X more us we from Overall, wins. model introduction and the resonating particularly that that learnings to Store of we that to have really is front a are around of position. really solution getting we of Store extended some technology on for us strong good in visible in assortment lower and Future has There of of a and and main well the are feel our can quickly that use of evident to with already the the our about the room consumers, are So getting in rather more of Future where Future efficiently the the very our fitting being the operating program in cost world. than terms around digital scale been Store are in of elements

of So Future international the will this later first the versions season. online be of Store

very and how much later making impacts very So but any until Future, year. be all about it's for capital in won't 'XX days, it all, in we're 'XX and decisions Store of early we the the happy with,

have I XXX back. meaning on into the is continue broader because getting the Stores see us way are stores I -- back, it -- Your say of what in is for roaring customer sales points stores, we back roaring question that digital, over to and we good is news distribution.

in the have the have we industry, service. fitting We best superior model

to stores declined. that's helping that's And are have. delighted that rebounded that they given not back, and we're in that see entirely So the our considerably. stores has unexpected roaring have way business Digital

more most productive Our productive customer. who both a shops for channels. customer That is than us the Xx customer customer single-channel is

on channel is than primarily to focus in. which shop customer, the she So the rather wants

think next We'll about you hear in add about less to customer. channels question. take want us the Okay. expect to and future more should Anyone the I talk anything? else

Operator

Evercore Our next Saad comes from Omar from question Partners.

Omar Saad

I us or getting happen? was point also And and next much level? benefiting lounge mall some at levels COVID on by think that during traffic back. wanted your how idea give mall the happen of obvious the and you could needs during rolling reasons. to the pre-pandemic to seeing ask a how Are of interested for you big need sleep it you of Maybe business XXXX traffic this about get expect COVID around your you near I became at some comments and to to rightsizing kind anywhere a could stores comments

Martin Waters

let not those the business, is the dimension The intimates to the Brad huge. shift to go categories not rightsizing I'll just but Omar. relative us. It's business. an but category. the most it's the business, rightsizing. It's the not That's size the for a me part major of We're Thanks, answer in of business. important of important

while of not degradation, of there categories. those the some been some some a shift. has deterioration, It's meaningful participation So material and lowering

traffic, we're to seeing traffic in XXXX mall Brad? 'XX, looking levels. While I'll It's significantly back you, and yet up back mall where Brad 'XX not no, was levels yet. not on to is for it specifics just but tell you, pre-pandemic on the at

Brad Kramer

Yes.

from Victoria business, that PINK PINK of XX% lost share and We've in peak XX% lounge about sleep And overall the the of of then the PINK kind the represented of an business to volume. at within business. the recent sleep represents some perspective, business overall from apparel trend. total So about then apparel the and a business PINK the lounge within XX%

Martin Waters

Yes. way. and And us. we for makes be it We're more for into grow sense continues cash intimates a important brand flow, PINK leaning intimates It and always think wasn't the is health most overall. strategic which PINK, of change to the and and the that

Operator

Our next question Greenberger from comes Morgan Kimberly Stanley. from

Alexandra Straton

you've there's us price? Alex This is just to a the Greenberger. talk to opportunity just of give on And follow and discussing. quick you wondering opportunities Straton was I you on quickly if price in on assess where could Kimberly for quarter-to-date Can sales up were how wanted I kind you the color is challenges up then follow-up taken to me April. you just of about trends kind any compared or

Martin Waters

Alex, in to to able have is to We're on question. latter a be part test blessed reaction thing out systems situation. of know it. go learn on key TJ I us think go and to to we'll But enable that we test agility So our the the the full consumer about pricing to it's before

place are be dynamic, a what different that different the to we and anybody. market find in have prices cells in testing multiple is incredibly surprise So categories. we is shouldn't And that

impact While different we to of add $X price different to by or do the real it's it that see and feels simply geographies relatively around the we panties, straightforward bundle country. when $X

we conscious for, relevant. share margin than value to be to to we last we're also our and up needs it gas diligently that year, as us carefully open that we XX% not she solving competition and that elsewhere. competition they dollars but problem do the protect a We're of can give were it's there customer with very and and the So also this is as prices undue to year for super wallet have higher sophisticated

promotionality give have that's more if fair share our compelling we in offers. to make of spend, sure leaning bit We into means what And order do. get we will a little that to

commodity specific a business. So we're I you not give can't in because a

items. We have of thousands

to the of at them you many at hundreds to test needs on meet that needs and different we're the our have that prices the the trust the of business. of times. TJ? We are of got different the ability best managing us meet to And profitability of customer

Tim Johnson

And from April. quarter slightly your more like second I little early around looks than question, to an a of on part quarter, expectations April, May although Alex, the think the better second start bit

has always best strength period expected strength semi-annual that sale been inventory semi-annual to quarter of would ability full year. our last month on the expectation this position, the or based of year June run the be around to compared our time Our sale, for the current

semi-annual semi-annual like will business year's look this more sale So much historic sales the executed. has

to we the better newness then as in expect season, starts So of new July, be position. see in upside the month a opportunity we June. in come And to inventory for much in-stock

chain last see You all may recall, to inventory July started year supply and with early challenges. third we the quarters, where dislocation

would a of for the as and good So be well fairly in line with guidance. probably business should our midpoint July think that we month the

And going range. deliver be to month. most July, to So our fall going working be or month would to are midpoint mentioned. challenging again, to do in the middle diligently May we're quarter the going best of the Those our them the to the summarize, June Obviously, always the somewhere better. always probably somewhere reasons was of in but is not expectations. for be just hopefully

Operator

comes question Barclays. Yih from next Adrienne from Our

Adrienne Yih

much that comment they the at large the apparel at very How fiscal wanted baked about to It's I the becomes ask year nice large sector, you where the guide? great. promotionality. But very should when of more to back The is industry historically, stores into Martin, be. on looks promotional. product the see for

of online a East, what percent update? steals particular then I impact the that your know an you've China of it stores. small just but from of apparel from number, overall And a intimates it's TJ, product China? in the us give you number So that Far to the is the seen sourced the I'm business can sure on impact consumer? And print. retailer wallet, from Does

Martin Waters

that. try We'll to Okay. unpack

be to the is level in So it our the Yes, is. that expect guidance? into we baked of promotionality business

So we about we more We're year, that see. during but And feel promotionality we of the flat. we we than all. what last a about more reasonable is promotional it's of of and modestly have through the China, were to it particularly modestly line the promotional amount comfortable on China have percentage single-digit total year. of sight dependent On not inflow our a China balance the be of at merchandise. will We're quarter, what

than obviously We being situation happy stores where we're the other tough say to the closed have are by online. China and in all not business is -- in our impacted venture business joint

there's the retail very to in impact but production. So little to at on the us us impact China, level

So I both. there I to was your another think question. aspect get

Okay. No, other categories. was It it know was. I impact of the

So don't data intimates. promoted categories to when say outerwear this, yes, Adrienne, are on have we

the of track some our So it know or store we jeans so. of yes, wonderful that from it's other probably market, we a share contest retail a not I competing could a from idea And from money as intimates see be the out of a But in a view. leaders, for be feels approach a and view, it and of our with It's and go teams could it or just that trip. notional a category-by-category to gets thing of from and an they venue, Victoria's. the they share, we're on And customers all of about that's it a who mathematical wallet. be intuitive an being that pair that could the a I intuitive want way, lipstick point how when contest. When that spend point mall category. be. been we're just it's can't or that call then money as day we the spending given a venue, much play. it it's We in always amount customers will spend to that divide call to And go the to listening don't knowing have feels the And on malls comfortable up it be always we listening money have to do well and people to think by and always make

Operator

comes UBS. from question next Sole Our Jay from

Jay Sole

that price company again? pay secondly, business outside of just any bit to update higher you give it's to U.K., consumer you the the bit more to an us to China, has hard Are little there's a that that once you markets, worried And Martin, I hard sort on stop a so if see some and just the international what specifically train worked bulk little there? start return pay promotion promoting then you talk if of slippery just slope a given was could you about other can and price. a also to hesitation of key a the the brand of wondering

Martin Waters

question, Yes. Thanks Jay. for the

be it. get take consumers reverse know retailers We to the periods. yes. forward can in in about the train we for business? overly anxious we to the not permanently Are of Definitely, The Let's promotional. discounting. being we For -- fashion more best wait best and brand other healthy sale It's less promotional, it retailers order. positioning not the there, long-term promotional for can that retailers sure, out we are

at of fact And that We share well understand. wallet. customer We the it. promotionality. for we're the get the -- to get that we it balance same responds she's time, battling So we

bit I And everything. a It's thing every a as day, XXX another. say, X so times balance. day. of a or balance, It's it's little It's a not

So for brand, the and transformation very, we're health -- this on It's notice just feel about of the we our the about good know We're of in transformation beginning we're of very we we focused only And brand the brand. repositioning work the it. used like mathematical overall the consumers we're health to conscious of the But the time, that it. continue into that do. on less from based more about a very of calculation it. We're X long business brand. to year like of research most that to us which are kind feels the

So we do. to lot more have a

to have voice We louder. our get

is a more have amplify point diversity, equity, promotional. for world. all less message important brand than of are of a We our or to That people women more on promotional significantly inclusion of the of lives around to being mission being the X we improve

there to against Secret most a the important are the reminder, Victoria's around are to relates business. business well us health world international. stores run, in very last who it franchise X comps for that, our operate performance period franchise are and strong We're seeing a As in is international relatively parts partners stores These The the Those strong way. business. very magnificent we're regardless in super has seeing the of been But soft fantastically franchise strong. year.

but of would part second stores The be stores most start they is busier people booming all, those travel not retail, traveling are have airports not than business surprisingly, well those that have reopened, of where reopened. were. back as more, Most as

They're U.K. the good to in in we with fantastic market our with in that be feel of we're and part omnichannel integrated a capability have terms They So in ability offer that of to Next. joint The seeing experience. thrilled growth Next, an is partnership in our operator. improved venture business. a

structural world. very part business who that months tough. money, good that is as extreme around some Columbus. more is dependent feel we're market all and be XX that United everything of the who with and less dependent she our for more we money the way be back That really are there part of also The thought partners then world to several should it finally, in, which get woods business big we -- business are the States -- a having and change thought see we as a down, going only ago, locked are would going. normal operate shipping a We is will the for to from whatever our making the us China, experience It's is we a countries be on the in we than country and experience, seamless on visits customers from experiencing business in which was the of pleased we difficulty. in our direct-to-consumer out associates that were with the And losing that well. move is business holistic So we in thing. fourth omnichannel business rather we around here involved I

my stores much So the they're with operates we Secret to wishing world. material on completeness. mention didn't be in I believe Victoria's in don't Those season. very partner, We best. the in mind, I will and we stores stores business should there impact them expect more to consultation earlier reopening. and the I'm but a quarter, decision Alshaya, those not who We will Russia, of close for our have the focused closed Russia, all part be them probably no the that that -- on this that made will business from

Operator

Susan Riley. next B. from Anderson Our from comes question

Susan Anderson

color are a if there apparel bit responding. business marketing And and also customers. any categories weakness like just and a the any little I intimates but sounded Happy more Nation then the give pink reads you're how brand you was the It little on was wondering is consumer bit could also, strength of or drivers the there. early on maybe the on to And or thoughts early new new lighter. curious how strong,

Martin Waters

Happy so I'm happy Thank that. Well, asked Nation. you you for about

you what on think I answered you in. question your own It said. is

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so that's work notices large when encouraging very at And and market the products. good notices good

our Amazon for seen partner with as you've us distribution in beauty extended business. So just

it potentially absolutely of forces to we should example You partnering other our will third Happy who we're that. good through our for us initiative to to with it add do us a other to expect can parties, where businesses overall look see makes customer VS&Co-Lab that. is sense where people, strong partnering with be with And join Nation experience,

Operator

Tracker. from Our Retail next question Marni comes Shapiro from

Marni Shapiro

just either or participate in already a the these growth to they as and behind of look is well. bring something would great something Nation company categories in to this categories going I invest curious Frankies or do I'm and you're such you And to a that either just to little a love -- investing upside small behind thoughts as adjacent in-house But you Happy bit altogether? ask want in about guys I'm brand. your accelerate it's here. that brands even

Martin Waters

brand. Frankies it's & partnership and a very models have both stake customer those partnership it us our brilliant enables have week? to Francesca the affinity it meet I a Yes. fortunate have with real upside, we business. an We a also her. She's been last Thank It's from question, Lemons, with to important, out years. but fabulous, and love was brands, it for we Love force. last And to amazing had admiring more last experience. in female-founded strong hear Marni. week, them customer with you. to It of week. participate for Yes, both. you with creative in several think Good we've rounds It dynamic minority her. Was meeting for the that a brand, fabulous us the I we For in

in to with there's They them. to if for to of partner talked they that anticipate halo of of of I of Secret really those And overall where, in underway. all Victoria. third & is check, potential a that style just an do business affinity the to So is a is if we the there I would bring proud second about those of significant the if the there. would all lot family third-party good underweight, we partner currently building are where overall. week, helps we're helps brings Co. where in a brands. very we get the and And & things. think We of to do with currently to Lemons, nod categories it's third-party reasons are foundation to both and groups building reasons with for on our VS&Co-Lab to us brands. partnering, And initiative it we investing customer think X house announced And pretty that merchandise a One X Victoria's it a get cases, more it's last Love yes, why us Frankies -- we're check, the check. brand

Marni. asked, and So you like brand, the I'm I'm you glad glad

Marni Shapiro

summer brand. a of cool Such Best luck for season. the

Martin Waters

Thank you.

Operator

comes question next from Tarlowe Our from Corey Jefferies.

Corey Tarlowe

credit how just card bit You color and a and your and as strategy VS to on business? mentioned it you products relates Amazon. And more co-brand PINK little briefly for highlight the around you then new just your and could can customers? that's enhancing provide selling Amazon Can mean attracting beauty what the the launch that offering

Martin Waters

Yes, happy to.

business. have incredible on reminder, just beauty we a an So Amazon,

$X beauty in business a We have billion Victoria.

XX saying I'm in in the of America. top right fragrances think We X have I

we have America. business And access partnered business do could We XXX-plus other distributing the only We to -- category? if cannibalize points through from that those question. we product what sense in products with we That's that distribution and we were fragrance to already How people And a think more website. that's is of #X the if have? it makes single are proposition. in test the the who going to it much

Amazon with for us. amazing delighted working who've are to We an been be partner

a gets we'll learn. not to but additive our us. not business, it's mix that to that initial it shopping currently and is with who existing continue indicate us cannibalizing results to consumer Our it's test our new

way testing it's really for stretch it our We people we to do full I other offers where gone that initiative haven't able with and sense it to I We're But model partner think so. by the how it. be interesting, bore a on into any imagination. might makes of think

up October, have with data We'll early the So year, second more partnership. at the investor update we'll that Brad, pick question? our the more of and to points. delighted you meeting in later days. do in part we're want But

Brad Kramer

Yes. the that and programs, Corey, large programs place in we loyalty have scale. with very to dominant X are run at respect today, and loyalty

program. loyalty We Nation have PINK a

pathway We members program high results is we to credit-based customer loyalty programs, from financial that Brad, year. earlier the of they who see we made modernize with our The credit Both are a and programs. accretive have those engagement, on provider. that X is those both provide of a very reference programs Martin this

an we'll noncredit again, with a adding meaningful year not And and very become business historically. that overlay early step first that a about that, And Red a that the a part launch is impact was of are expect to and would we the that second a XXXX. more to to then had successful, product in and Mastercard modernization of noncredit The the that begin of program later of based fiscal loyalty I that, the excited very will relates more this have results program optimistic that co-brand piloting map road the of occurred that first will And accretive build we're modernization quarter. year. throughout

Jason Ware

we for time I X question. think have more

Operator

Kloppenburg Our Research Janet from Associates. question from comes last JJK

Janet Kloppenburg

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Martin Waters

PINK around an followership, life is and PINK no purpose women side structural The to their alive us It incredibly great in early Please & business business issue that really unfair enormous be clear well. busy, don't people, young PINK. for strong you, Co. to concerned Secret by gives side. Thank with are great is Secret advantage merchandise. sense about There absolutely well, stores performing positioning is Victoria's planet, have getting in PINK Janet. whatsoever. cycle. a Victoria's is It and with makes and an

Victoria. is rationale for is That's sense and it and it little strategic for dominant strategic us. incredible it intimates owning to sister in us has having women. the operating most the it young the The it So that as player sense for real

our the be That category, would do primary focus. and grow single wave customers lifeblood magic we if any want in to If could a we the which the of say grow that's young new it category we bra So one could bringing into and much, panty business. business PINK. is

the That's we as that. that participation We're a with absolutely of consequence and I'm from a So businesses not planning lower not down. have intent. deliberately if those apparel fine sleep,

relative of Secret. to offer, most higher the and parts the We because planning core sense are the Victoria's are and participation in make business are those the those have swim of a to intimates deliberately that

that incredibly a our fantastic all with shows positive carefully Love the anyone it's and that is sense excellent concerned for about, the Cloud research I resonates strong, us. well want Really We've be been we launch. brand health has seen customers. all makes that strong. business, to very track you. don't hope momentum. I So of definitely it very this to And very very of strong

per least bra year. are to launches at committed We X

be yes, will back in there the So year. of more activity the half

both to that brands. reasons and about we we what the bras spend in, Janet, you that bra incredible do. time most say we we're developing big more It's business working and that commercial to bras, our anything else expect but reasons, me important our talking than on wouldn't is, talent time for You tell I'm of in more category delighted have

Jason Ware

and in interest Company. continuing Victoria's you your thank morning, call our concludes Secret this for & That

Martin Waters

Thanks, everybody.

Operator

Thank participating. concludes for That today's conference. you

disconnect this time. at may You

Victoria's Secret & Co. (VSCO) 1 Jun 222022 Q1 Earnings call transcript