VSCO - Earnings call transcript Q1 2024

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Operator

Good morning. My name is Sue, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Victoria's Secret & Co.'s First Quarter 2023 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. of & Reporting Co. President at Investor Vice Secret Victoria's Wynk, External and Financial Relations Kevin Kevin, may you begin.

Kevin Wynk

call ending Thank you, Co.'s conference & to Victoria's the Sue. Good morning, First and Quarter XX, XXXX. April welcome Secret for period earnings

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

Tim CFO, is CEO, Joining Martin me on call and the today Waters; Johnson.

today comparable call available XX SEC GAAP release, of are exclude our filings. to adjusted are items press and to We Investors on for we and minutes release in filings measures certain SEC of other Reconciliations non-GAAP most and answer up our results described included our Certain investor and website. discuss section results press in the the of these presentation any today questions. impact the our on posted our the measures are the to

I'll now over turn call And Thanks. to Martin. the

Martin Waters

Thanks, morning, good everyone. and Kevin,

of foundation believe defined each company. pillar into future. to and will shared of to are the growth; the growth on focused the to our transform business, that steadily delivering initiatives pillars we've number number three, the And have we are consistently we outside of our laser core; and two, strategy: the in three Number inside provide strengthen long-term one, we As ignite and profitable

push team's our our and for world. and right with all the into continued work partners dive we I for of strategy. as are to doing for especially my before quarter, associates thankful commitment I'm we they the And forward want share and dedication the appreciation around

the digital prepared stores for that intimates whole world quarter customers overall to anticipated, in data compared clear last our volatile mid- was North the Sales entered feeling categories macro be challenging performance continued our And to market market environment. and down the about overall digits year We as America particularly where a customer. core the and single across for difficult external was first pressure the and year. the indicates challenged in high as are to

progressed, quarter challenging. business continue with to the of promotional we we America sales pursue were ended continue while with quarter our more became And than line we planned increasingly share in original the we As North -- our expectations, in our consumer spending. more as and

our a As the the adjusted quarter result, lower of income ended guidance. at end operating

note inventory down positioned Secret move at last for a the year, to On quarter, quarter and compared low double levels we're digits the forward. Victoria's positive PINK prudently ended and we as

its quarter first Our spot globe around with international as met bright and business particular Me China VS&Co. expectations continued Adore part a the during of stellar growth the

the our particularly the Conversion about quarter, a channels year traffic in first quarter both compared adjusted flat sales X% Now minutes. sales was America softened expectation. turning traffic unit above income for levels. online trends were earnings points and few last share in After quarter, fourth $XX in the remained a solid to In below compared pre-pandemic first growth Adore million North last last the X contrast, and quarter in numbers quarter. operating with lower In first first finished sales quarter to year. our where retail was last but average year. in throughout stores $X.XX. line rates year, adjusted Overall, than declined to percentage which the diluted Me was represented of per the was

and category was relatively last share our down basis, bras in the our panties share a domestic remain in market with PINK, that in Within We category. merchandising perspective, leader rolling intimates both quarter impacted sleep Victoria's year was approximately by perspective, stores to flat our in and apparel PINK a identified contrast, Secret, from bras. outperformed online, and businesses to the From Casual for previously we first in starting followed categories, quarter. in Sleep another domestic On X continue difficult estimate casual a market category intimates negatively challenges X best-performing our the sales apparel share the the market be year-over-year. Beauty XX-month Again, points. by while which had to

across and retail growth earlier, and for mid-teens as total were As its continued up compared sales digital business to the and sales experience in profitable last The XX% international international momentum our reported business well. up provide I to first with system-wide stellar stores We quarter digital globe. performance the said experienced year, China restrictions partner, for the business stores in year. quarter China to and our COVID-related continue our strength excellent last our first Regina our they Miracle. achieved In the and business the and profitability around continues leverage in particular, outsized as capability in strength lapped of growth

store world. our opportunities the all growth around We of about optimistic and profit continue for partners to be sales,

experience launched to to for expertise financials, in on newest we've having our Aside last and customers at XX innovation, fourth executed the all to of on and Try-on this Me's developing term, and inclusivity solutions we're and Adore our and for actions the week. our We're including, our support plans Adriana technology for rollout beloved featuring focused relentlessly of full key launch services customer newness look continue new delivering quarter, and and brand from Lima. off a customers feel Best in for to the the our Victoria's new about to several experience of customer and campaign cover strategy of launched long by our return range program kick days, and over test of positioning the pilot the leverage in respectively. strategy and third Bras product broad Secret loyalty with campaign outfitting February multi-tender Adore improve Victoria's Home membership with on needs. vs.com later customer customer the product PINK Secret the PINK Me of recently the and planned Solutions a a with Heavenly icon, to We our comprehensive a collection Enhancing a Bra focused of of solutions

foundation to focus transformation actions by reorganizing efficiencies of organization our streamlining our the took with and on growth. advance We profitable to a yield structure further

We overstate report later to women April. on progress journey celebrating excited and fall. world published It transformation. ultimate we are ESG be expression this how around coming epic can't our fashion brand I ESG the in tour iconic our XXXX and the make of an our our continue from about show, will reimagining of world

financial second experienced balance quarter balance into updated continuing year. of quarter, first and for Looking the of forward in the the with outlook the to the the the the quarter, now we've we our difficult environment year, second

sales quarter compared expect decrease forecasting in in and consistent the year, $XX the income We million first mid-single-digit the operating adjusted to range to last are $XX in million. we with results, be the second of to quarter range to

and mid-teens levels Victoria's core business compared end Secret year. the in to inventory last the expect our of of We be quarter PINK second at to down XXXX

customer we're our year as the which For current are second we initiatives quarter will assuming North begin benefit out the the year, from the new anniversary sales sales improvement half [the] America in trends with of new trends, stopped experience continue second being in as and now strategies full and moderate to rolled this growth throughout the year.

flat last year. be sales down assumes will compared mid-single to to digits forecast Our overall

full business for and weeks, growth is single Adore Secret PINK With X X approximately level points down approximately our At points the operating XX Me, new mid- from week X%. this in XXXX, growth of sales, to XXXX XXXX. year ultimately the to in which and fiscal to digits XXrd due high of Victoria's for be to expect the results our X% X adjusted rate to to of we now X to income

initiatives our sustainable growth strategy, for of the innovation, pillar will remain strategy we this long further and of to To a tour and of Under our cautious full new be as continue world the our company experiences future While pillars positioning experience of rollout highlight PINK, merchandise to the next we're balance our over international for in momentum store new reimagining of of XXX an successful on the loyalty and digital few. has customer business us partner course, the than new expansion a the Ignite bra focused the term. markets in program, strength with position in years. each long-term new Within launch fall. more include core, plans our and over format customers we year, expansion planned later for for customer several technology, the X in our three steadfast executing growth, new coming initiatives stores believe the and

organizational for example, And they in quarter, foundation, continue model. expand plan under we're are. platform, we expansion for to our to We the took leverage customers additional also office to to meet first scale our Me's continuing operating fall through of third And technology the on measures channels distribution, finally, our the steps the and Adore season. starting efficiency by to quarter reorganize structure margin and continuing drive where take operating transform modernizing Amazon, and to the in home

the are remain XXXX, We've and of October to to be with committed 'XX. initiatives opportunity in Investor more identified expected to benefits total our future with These the Day. at X/X realized underway, realize to well initiatives benefits and begun total the in million savings we $XXX related than these 'XX

are strategy a will evolution return recognize journey. we brand course, they their full Of that neither overnight, our potential our nor

believe also they through are the and turbulent current a into We growth to the path clear future. environment

we leaders be as volatility this more there and results future-facing is understand a and relevant year. and more in ensuring company continue our culturally as on environment. in become focus this could shifting We consumer be Our to

to However, and to long-term targets value financial delivering our we shareholders. committed remain returning

happy you. to comments. be concludes this might have. And time, we'd prepared questions At any that more our Thank take that you than

Operator

first BMO question Simeon from Capital Our Instructions] is Markets. Siegel with [Operator

Simeon Siegel

add margin speak And because What of now if revenue embedded improve, Adore and balancing year? think full plan inventory you to impact for with in gross through the doesn't environment then don't you need it rest year guidance? goals then, XQ top line clear? the in just the how TJ, and fixed to margins? And SG&A the what's cost versus implied just Martin, cleaner, deleverage you of goals to can Me was to what gross should the the

Martin Waters

in I mentioned our prepared is inventory as my remarks, prudent. positioning yes, Simeon,

about We XX% We XX% -- are the season bought about fall system, open. the our in outlook. being cautious full approached

we're said, focused second And and to in we're as working. on promotional being excited PINK main review if able ability ensure of talked we we in continue outlook. have to as Sport be thing in as see promote very well more the as we know, season our we to been in we agile in particularly launches, if category. the are But a to That switch within category. about to are two bra balancing our about cautious get you chase as panties launch market I Big have my Obviously, quarter. and non-sport you. the particularly we need many Thank a our is things bra anybody, fair And of that it and the is about to into the So the And be. as pressure, non-full intent the newness, from new to on as share. course the initiatives and TJ? day-to-day relaunch we well got -- basis, prepared And being the it's in fall as in plans, order we've remarks. other share that we as prudent to need environment, in thoughtful pivot act. Simeon, will say, hard

Timothy Johnson

Yes.

the gross of think at of I to positive to the XX operate does total, gross mid-XXs, Company, low-XXs quarter think a from part probably we've VS&Co a a before first time spot company, higher in you margin or I Simeon, the Adore on. XX or VS&Co year. quarter second on in that would depending margins gross points. question, are the big than your have margin basis on Me had of in about Relative impact the the commented perspective,

that business. So certainly, we but sale the that health and health overly of the not appreciate of material,

from I of the was about quarter gross the business the because gross in a from VS a step deleverage quarter And gross big and first margin of rate taking et margin think and was back basis benefits margin points and perspective, PINK in XX of of some first VS side PINK down in rate supply B&O quarter. quarter, VS in margin the chain, for the really up slightly was cetera, down PINK. selling the for the because the actually for the

answer the that difficult about dollars and Simeon, the impacts. different level first I question standpoint, actually, similar expense fixed an to quarter. From a I rate to guess to speak slightly hurdle from would perspective, of given we're talking sales SG&A dollars differently.

VS dollars year-over-year. PINK, down For we are forecasting SG&A and

second quarter, prior year. is first that compared quarter down in So the in to down

each from million You million quarter of X of that we're may range recall the standpoint, quarters last the in year, a throughout an to down year-on-year. $XX expense $XX

a So expect to multiyear structure cost the good the balance VS continue that through that, management and won't PINK from No of reason the perspective. year. of

and on the the into progress we we'll would that as on cost the and impacted the from we're start be Last second then standpoint is and positively the open up first to and see on. point in side an that goods are Expenses next margin or I we of fourth margin confident move make to question standpoint. by make team to impact the expense quarter initiatives, cost season, our holiday working cost foundation initiatives those around lower both would the continue quarter and of a Transform it

planned hope perspective. is moving a everything So along helps. that from Thanks. as cost I

Operator

The Alex from question Stanley. next Straton is Morgan with

Alexandra Straton

I just couple a for you. have

The first to top in the kind line. relation is of

then from, us the for are can and guys there America internationally on divergence I'm driving and think with is unlocks between performance? Adore technology the they North micro level doing how you else Me different about difference? And just that So Are you benefiting what remind and a do you there? wondering, of that Victoria's? that bring kind something international you the Or what just secondly, something them capabilities on

Martin Waters

Alex. I'll one, for take Thank that that. you Yes,

strong growth a execution partners in So the the outstanding sales is around which performance truly North mid-teens between performing who I One, was world think, divergence of things. very system-wide in versus very will I of world-class international, and America, our are to a strong, number the literally way. point

that year, a was our in think feeling of impact a is a income large North number world the there to on COVID where than a $XXX,XXX customers is level. that America a last is easier positioning have more more North are our our more compares slightly economic in some in Secondly, at elsewhere premium year delayed than is where acute household impact I the And America. are below customer it

So a to will your where there are say something in just point factors that out, I China international. I there. are But very would we of overall, number doing different strong execution point.

and has for Miracle work products that to well Our forums. strategies able and specifically partner, us which react China digital Regina read also online for and develop be really developing built extremely and to market, capability in the influencer well is working

So China, plan we're we expand benefits, that region. model Asia for that's developing and delivering a throughout definitely different to

of optimism lots international. in So

good a buying to And for of in the rationale the where relates it bought is sector Victoria's that company. market two we of say Me, pointing. Adore and we pointing purchase Adore very we the company we profitable Me, PINK at that growing a As often companies. that's don't and and One, bought value the

many be identified three We're first are though more. that. that bring testing decided and Adore We'll PINK. will can And is in second the many bsn.com this Adore June. Me year, one. there excited that are even We've the company, it's and month synergies platform we've the Selling for number in larger many, to product technology system, these of Me our just month and focus about to Victoria's on begin on three, many, later the it. The

don't test your it's you're cell. on in because So see if you screen, not it a

the Me a PINK with that Victoria's during Number system, one. on again technology, Try-on which two loyalty over our season part Adore Home capability test and great the services, on basis excellent throughout number have AI, have be years QX. will including which borrowing that's they perfected So member And launch program. at many develop to will the beginning fourth launched then as is of

lot a going Me. Adore on So

very the We is integration that acquisition. continue fantastic, and well The very be far. to pleased so is going management team with

for the question, So thanks Alex.

Operator

Boss question The JPMorgan. next with from Matthew is

Matthew Boss

balancing And you in trend promotion between Maybe in So change elaborate you competitive on dictate actions? first, the you Martin, what the secondly, of the are the comparisons? have seen guess you share? far the your front any so cadence quarter, X-part easier to you question. saw traffic that on against could I May could act in then elaborate market you watching mentioned and potential on that

Martin Waters

Yes. Thanks, Matt. traffic, I'll the wider I'll point balancing go to but TJ act. on take the the about

content, retailer. to a intention Our added emotional is high be premium value

outstanding a bra particularly works, big And play. that, launches market newness promotion. category really through works it's of go through. game the for It's to lesser and panties, to in in to and cut is generic we the we XX solutions know That that that category. Love like extent, to share Cloud us months. a our non-sport they cuts intent bra the category, harder That's in pull us. that where a with market the in last category we minimizes that more requirement that bra our launch like off over the innovations growth trick And saw little Our where for for to a

So in very we even category. market XX% share, though have at position strong over that a

Target, to newness marketplace, are it's were for item who at harder price and selling and We Amazon, this compete from a quality us on pressure basis innovation. just of particularly commodity and the that under Walmart, the

those So battle we promotional in being areas. end a some up drawn of into

quality it's the comes But category, we're we we have. and fall marketplace, lead get make aggressive intent that it in that when season, a which very our balance have sure we sleepwear to product, is to the best Similarly, right. with confident the to

talking I'm that thing that's So sort about. the of

under We're the is and very focus to on a area market share is you subcategories each an been not ton Sports, category to Previous closely. as we walked management that intention know, of where Our decided we've market share. of penetrating. monitoring in do both.

back determined that are We get business. to into

QX X start QX We the do board that to to traffic? we'll -- have a in put launches take the in in very exciting launch runs you that arena. on want back some TJ,

Timothy Johnson

Yes.

our from commented level. in at a pleased particularly as remarks, I fourth the quarter, think perspective, were during prepared traffic store we Matt, we traffic very with

opportunity points, there very, customer, of to time was was and environment, and traffic when strong. promotional very were able we one So with significant through very cut holiday our store the recall. rider it a was during It period was if you the

we February of is really sale store started semiannual started at we and mall into we when once see to end perspective January to move start as in So the and lag a traffic going level January, went April. March through we to traffic slow, into from

So we some quarter. intimates intimates connectedness it and domestically market high the quarter, including terms relatively in think and we single was of down the dip being roughly in level in to market, saw the was fourth of store and a traffic digits flat flat bras challenge in do there's between the where relatively panties first

we and biggest a to do to business. panties So that's in extent in the certain Martin's of our part particularly bras, believe point,

our that's to assume and drives when the think to that have was there connectedness stores that what traffic. between We We traffic overall challenged. the is market store-level

to working our best. do we're So

our that be in business going things a about launches, remarks, And first year, are dozen impact. term, second number that mentioned, as we not the the to there's think present the probably the But planned there prepared balance are the things we particularly and in a a bra quarter recognize near different as in As can move we're challenge. new into newness Martin quarter have that in we category. talked our is a positive of spring for and a half we around that of

Operator

Bank question is next from Lorraine with Hutchinson of America. The

Lorraine Maikis

competitors give you a hoping in Martin, been the America. any try change compete Is diagnose on in the promotions? was business interesting anybody North was the intimates first union to a share? reacting and take of quarter? could it Or to state big Have such are there able trend to you I this? us why launching newness And then your how simply is to

Martin Waters

for so single that. but silver dramatically that I think across the for the have strong. be we all QX particularly COVID, see decrease Lorraine. bullet belief and that also were question, pressure now moved QX, all why we of we out the To tops women cycle belief little board Good in single-digit are in the a and a during with elements with on, things bit other and a some outerwear be don't beverage to food as is it beauty that answer market [outer] between don't know going including of our categories those numbers high bras. turned market. there of that and wearing things. that our of and some holidays extent, has vacation and There may spending may And the there require There's some are it and and spend consumers,

do reason is. stores So structural but have as to innovation. to or overall the traffic into to Where we're category got environment. that single can we there's reason we the And get down, it why is no confident much I a with is that that as difficult do

can. loyalty. Let's for spending is launch that on possible believe is than our of of other Try-on and of that's and to to happens, rather That where leverage it tomorrow part of money provide to really our the and on customer program as testing and best the we customer increase to the return And and increase customers focused. [indiscernible] part advantage that that using our at and try loyalty we are categories, spend the and the Home I worth technology highest where try category that it's reasons get

that's I So for better Lorraine, wish you, -- had answer don't I a but about right now. I

Operator

The with from next question Boruchow is Wells Fargo. Irwin

Irwin Boruchow

for market. the questions on Two overall me

need counterintuitive why any that guys of have or known -- intimates the kind it It what to which high flat when you underwear? kind thought change think what resilient just thoughts always trend and down more to type panties the of a share loss is seems thought But that and versus And little people those the you over the why we've to crystal just within be exactly bit macro a ball digits? kind Do seems then know know underwear years? buy driving of here. is I the are probably a to to the answer we've again, know the executing in exactly you So or bras, bras bit still can single you categories extreme on -- slows, don't categories, of from better?

Martin Waters

kind to of said question of we the a same logic virtual consumer It's lower is repeat so Lorraine's I response might things affluent, the skewed feeling answered, under -- and won't that in price Lorraine but both true, I the that question, I environment. if and category everything to know if is just to pressure add it less those be that

as losing share, to lower or the track share it best lease who is of the who at the market. we is gaining or tends end So doing be

an So high added more doesn't when volume that but we're down, play is players. content overall our dollars than value, to are emotional And down advantage clearly, units.

previously. behooves got us find find to been to overcome we've than ever be that differentiated cut So to ways It more we've strategies to and to that. through

doesn't said category, That improvements in I to albeit as for it's can after will that's just that white I working has to quality I challenged, saying in can when be and back a said and earlier, a and that and innovation no market go market generic a we've like down. I no been a no flag and share, tough. mean default waving panties, in the and non-sports is gained we're to there it. us what emotional environment the get we'll most be, tell you, the some bra the and There Panties content. that's easier low-priced economic

frankly, area where better, is other can matchback The we our business. in do

that that always panty know choices at don't matchback impact for coverage sure to that's store, if have it us. of we nightmare the bra in two in can ideally business, matchback that choice a we least our We have bra. making So one a

in last online can important. during sure it weren't quarter. is ever be we being and been maniacally strongest focused as So as matchback at on both really the stores the strong is making we've the And business

So for room there's improvement there. definitely

Operator

Mauricio The is from next with question UBS. Serna

Mauricio Serna Vega

just the gross how for wanted and And higher promotional bit maybe expansion? follow-up and a were the the affected it a just And takes second, AUR. freight get to little margin the margin, much to on promotions if quarter? think how I I puts on thinking from on what Great. about freight, detail more are that you the the versus contribution second a the about then gross

mentioned your that I a more up bit versus were -- think a levels. bit you remarks are how pre-pandemic? higher pre-pandemic of the versus you detail little these in us give little Could detail prepared

Timothy Johnson

Yes, I'll take the first one.

to margin very the On our perspective, benefit around quarter in, in a perspective, or of prior perspective, closely. out estimated that a about the we number think came million. as had freight called Mauricio, from our potential supply and I around chain guidance, in we $XX Everything from

about that a that promotions would like forward talking to many, prepared up. were retailers price months been an our year I first tailwind many we've Partially offsetting that comments, as now. for expected ago, year-over-year, we us mentioned increased was tailwind, a in that quarter remind So looking was just

first business not quarter was very promotional last in a or year for our quarter So retail.

was that So the year promotions we to this kind back half of we the in increase more the year. saw of saw the trend in

was think benefits in partially margin promotions. selling margin PINK for year-over-year brands only offset higher the up VS total, with So I supply by the if and being Mauricio, selling chain

deleverage the lower the From from buying selling gross you occupancy or on where pressure sales. and really margin impact is to the see margin

think flat for rate quarter, occupancy margin about gross I as So up, selling the that margin an deleverage, was would buying roughly first a it getting to us quarter.

will be the in second as experience a challenge a second supply benefit chain big think not quarter, we of As ago. about We year less. quarter the did

up, benefit be, as slightly year-over-year promotional experienced in levels roughly the will I'll less. but quarter, to we So as first and what be real. deleverage the B&O say, not The similar same will is dilutive the

So to of in gross prior the in margin year B&O the the guidance our almost challenge second is quarter, the relative entirety deleverage.

So helps. that hopefully,

QX, deleverage. the all by QX, in margin flat is in up buying slightly. an The B&O up margin were and perspective, gross So occupancy offset from margin decline deleverage. selling Martin? about in AUR Selling relatively Think

Martin Waters

Yes. I can that. take

where want numbers, but ahead year you -- versus were XXXX, single don't year precise and obviously, I XX% gave of last we meaningfully digit XX% ahead category. Bras where were we Mauricio, to the XX%, were think, back XXXX, like, AURs of are in I give high ahead last in So year. of the let's very bra take we this

are ahead as to right pattern now we we digits year. pronounced, still XXXX, Have relative that XX% bit last ahead similar a that little So we intimates where back meaning over overall, 'XX, helps. are versus mid-single meaningfully of to but ahead but we're gave still meaningfully not

Operator

question next Barclays. The from Yih Adrienne with is

Adrienne Yih-Tennant

Great.

last Just Martin. on comment, that

given can from Martin, in is the incremental talk it AURs it you, of relaunch is the sticky for your going are the is confidence that that? elsewhere? to continues you then half spend or that forward? talk that about the back higher, that, of Fashion significantly of So then, can what for Show? both level level I Well, still about, redirected is How advertising you spend TJ, be to guess, And different? TJ, And

Martin Waters

to show free feel some piggyback. about So maybe and TJ I'll fashion take the comments then

So level AURs. in maintaining increasing AURs what's or the confidence

a we're believe. As high I else, where than that's the it's high-end better where it's where anybody bras technical, reason content, to said, emotional bras highly selling

the to We innovation. have access best

best to have the access We vendors.

to the design. We best have access

in very bit on advantage. even more a confident seen Similarly arena, we've I'll in category. feel we difficult we about generic feel environment. panties where some sleepwear, so because So that success we a would little also talk in of Beauty this have less should some it's

particularly Secret the strong being Adriana And business with Heavenly Bombshell Victoria's comps posted campaign another brought Lima for back over positive up EDP, why reason to can -- the and Beauty fragrance our is believe particularly bring Bar strong. time. So AURs family, into we

So and three with where I categories the sleepwear and feel confident Beauty. those most are bras

had fashion a that calling announcement, over a to In on, Secret wasn't announced small that We're are boy, faster Tour. relates it the minor a World lot billion As it big deal, X.X going the we relatively We show, Victoria's we there's just impressions. media the show. it announcement. reinventing

and brings of to expression and there the from brings so a The bringing it our rising America it around womenhood together being to and interest entertainment what our event to perspective And ongoing life is And way championing to art about being an in culture, ultimate show. be. is that different Really it I commitment a and a fashion the Unites experiences. global voices the will show single about up world. excitement moves enormous transformation. to their fashion think and North like of women amount

particularly. -- everything that's of with And suffice that we're but the Gen very in Z that but is we're kind can impact on say of it's and modern will a Gen on, to our about suggest in a to to that. consumers, which and iconic more past primary but is about do have the test early also take goes millennials. done resonate So way brand say, heritage, very, that And also our excited we'll An that our refreshing our we Zs have well celebration TJ? we've in positioning year very for the as it target overall. going it

Timothy Johnson

think we Adrienne, question, core the was of felt to maintain last careful were we an throughout the year part I the budget drive marketing for to the business what perspective, a appropriate cost the from year.

in call, in on prior about talked large cost a part, be will last tour as perspective, world we our year and So the the to predominantly fall. incremental from

relative guidance, year. the our marketing be embedded to of our no year of a So the from fall perspective drive the budget to majority tour in certainly world but preserve QX in would very cost incremental to prior the balance little to the impact included the

Operator

is Cowen. next from TD Jungwon with Kim question Our

Jungwon Kim

expect on a with being done that PINK curious little do what's And color -- when spending different before, but on you income now? in patterns see progress of apparel, levels any would improvement the seeing, commented further this color to merchandise? And you be helpful. Just various you're some bit by that terms

Martin Waters

that category. pretty business intimates PINK overhaul. required the fact The the level that non we November. is brand complete we required talked about in call that. take And a of significant the change that the really last And back in on about to happy I'm identified that's in Yes, the

lot which reinvention in within has the intimates of PINK, to relatively gap been intimates. intimates whole business a And and business be continues area strong which in the meaningful for us, imagine So we is PINK a a don't getting has sport so. into than -- for the been other

focused on it's mainly sleepwear and PINK So casual apparel. Within sleepwear strong. apparel, -- has been

we've the So outerwear. we're good that really feel positioned. got there. like It's well We

a where and think particular and logo logo to that a and I over be reliant a needs business bottoms articulation business, on fashion, So refreshed. have we and dramatically T-shirts, of been hoodies and

the new The be? will of is season. When of drop the really It's first QX fall end the very impact merchandise.

turnaround put seen some there the out encouraging. some And we we that put have built of results big that's haven't to be We we into honest. products forward, guidance that of a early the

very on So are focused -- we very, it.

the the and season, We new optimistic relaunch campaigns cut have for will to the marketing support we're fall through. product that

season during to around PINK. indications expect and we're about seeing the been that positive see as So has relaunched, more us also hear fall Beauty from well. and PINK

AUR us, With large economically more that regard from the economically in where is who comes that's a premium. North where the time positioning higher hardest international most share big that hardest levels. most customer in in our challenge Hope time America, for income in of are category. very to that spending less And so who portion surprises pool, the has at spending and a the is people the patterns, challenged challenged spending particularly that's helps. The customer discretionary has in our no demographic

Operator

Retail question last Tracker. is Marni from with Our Shapiro

Marni Shapiro

a to support bit a can sports PINK very dive actually relaunch. the we in looking area, to forward little much area. Martin, I'm the

and to on swim. VS, only call many talked before, through in You've it launches been we've the of sport PINK with relaunch all same a have -- your us and relation this about you pool see

could should be time? Because this you long business. in guys through are So -- bit you is little I've it us What why there's a guess, this doing felt differently? different you I -- talk

You own bras, how do you not own sport bras.

little So to bit you are different about what's make can you this just doing it What time? different? work talk a

Martin Waters

Marni. for Thanks, question. Thank Yes. the you

At not demise in sport PINK. did to the apparel of was X% bra We sport share area less being When around. last the to share You for lived company it of we peak in an have within wrong and the through focus sport think first market. than XXXX, and XX% Sports market completely bra we and to need about I the Secret have bras, Today, It bra business. share leggings company. market. the way and Victoria's of had the that's the be the business, the in went sports and of

Now if and that want tops bras. we that's is primary place win bras. focus leggings The is comes well, that as other with great. to The

we bras needs XX% that are other sure arena vendors our that sport in solutions on sport them it. available prioritize work need and different and that We be focus regular things market. making So basis. innovative best launches to the in of We who in than in with to have know are. the We are a

elsewhere share know training customer our go wardrobe. for that category has an that it turnaround? of that No, to be instant bra very and the significant spent ignoring years product we Will a we've

it. and to work, not it and in pan So we've in we flash doesn't after a got the have to it's If it, stick out. to get

proud to added stay stand building More will Victoria's products competitively the do it, will and that to position more We'll be be that back we value. with more can and be to Pink both for. where multiyear dominant. Victoria's. We come, approach we to We priced. in we a Marni. have PINK a take of have can be

Marni Shapiro

Love solutions And you didn't just did a Cloud. well as can you behind I ask that like the the the on marketing It solutions what push the was as same launched. follow-up quick feel launch, that with, say,

half forth, look more you're or think behind the plan like on year should bra out Cloud back launches going to put the solutions? of What's they Love that there? about the it getting As like we more

Martin Waters

impact. Great question. very than expectation Love significant It born launches are very we had Cloud equally. I higher would was solutions. say was us. not broad launch significantly all for for sales had bra a The

can't Solutions being provide. in to our category -- solutions is providing smaller. that specialist a other But speaks more sell us category people who to is speak the things and

it you we deserve. giving that I for strategically us So what too of important would the use you very that Cloud. be we planned didn't I for without to that dominant It the the And helps, Love with for last solutions. I tell level you and much have will have up be you away solutions. with the launch in but deserve the Thank saw Love was it supports that what advisedly. that like expenditure didn't saw Kevin. term that, fall competitively what season is question, that for therefore, a fashion marketing that bigger is than hope will bringing with like less Marni. more Cloud rare,

Kevin Wynk

Yes.

all So that concludes time. in continuing our morning. We you your your call this Thank interest for appreciate VS&Co.

Martin Waters

Thanks, everybody.

Operator

Thank Thank participating. for That you conclude you. today's does all conference.

You may disconnect at this time.

Victoria's Secret & Co. (VSCO) 1 Jun 232024 Q1 Earnings call transcript