VSCO - Earnings call transcript Q1 2025

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Operator

Good morning. My name is Ivy and I will be your conference operator today. At this time, I'd like to welcome everyone to the Victoria's Secrets & Company First Quarter 2024 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 Company. President at Investor Vice Secrets Victoria's Wynk, External and Financial Relations Kevin Kevin, may you begin.

Kevin Wynk

Call ending Thank you, Company's Conference & to Victoria's the Ivy. Good morning, First and Quarter X, XXXX. May 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, release. any statements harbor and statements

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

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

Martin Waters

digital From morning, merchandise experienced I quarterly perspective, during trend North both trends by Thanks, quarter brands. business receptivity intimates significant good and North encouraged in the that balance quarter. In the outperforming stores strongest customer month. And merchandise month. in Secret quarter, expectations evident our for we've projection and all both improvement made in third of both our particular, the perspective, of meaningful stores April, in see that business customer metrics. sales our in the or digital market improve met business, digital everyone. in positive improving store similar as ] the results to quarter-to-quarter, the our digital stores. and in in brand traffic particularly experienced month and to experience and time April PINK in the America, performance for Traffic improved and improving in digital am customers was investments continues April businesses. of a driven sales our for to our in report terms a which pleased a on North From financial are performance, We consecutive to the newness in delivered intimates quarter key assortment. we and improvement our first with trends we April, sequential and Kevin, outperforming improved the grow, customer strongest improvement America improvement we recognize was in responded, quarter [ We March channels and in experience our frame. conversion market to the exceeded the sales meaningfully resulted our in America In in our levels Victoria's

category Victoria's well, year-over-year perspective, Our increase our at XX%. We market The to bras. the business compared our combined quarter be for in quarter, in Secret last with improving the business third Beauty Secret for Victoria's performing panties intimates continues followed category, was beauty to and best and and flat consecutive was combined performance also the by with about a sports -- our Secret bras an were along and share. in Victoria's share and merchandise about encouraged From PINK market in intimates digital panties both along category see share market bra with remained North categories, to best month growth our gross quarter, was we a America environment very The in for down last the our customers apparel bras, and with April the were disciplined the trends retail slow traffic-driving year. PINK start helping X% quarters importantly, the strongest year, last the But for the performing was year. was to sleep margin as inventories experienced competitive. in to offset our to throughout improving with quarter. the sales last challenging and and brand in above several offerings compared were and rate quarter which and environment the managed promotional was

In have momentum quarter up the International profitable sales increased quarter, American compared net to to business to to year. International franchise first last Investor real and improving continued optimistic our sales XX% the world stores sales, the growth Day track and significant growth for low digits we in on addition in continues October with retail year-over-year international in across opportunities partners. North China compared We're and with we to as globally growth year. driven and double were by growth the in system-wide last first sales about first discussed trends, travel profit deliver of partners quarter remain the and in and with plans XXXX. around retail all our our our digital at

adjusted slightly and down million the goal, business. a committed we've better dollars structure we're buying to drive we initiatives year. occupancy we management At X-year of cost and and our to of rate foundation XXXX, and on and SG&A combination quarter believe transforming our Our and in model improving the SG&A demonstrated commitment within within our track operating on and $XXX our continually to were than goal, to primarily our operating to company our focusing our due to the Investor was established efficiencies The meet that model. Day in expense proactive of guidance, disciplined last efficiency incremental

and financials, actions the for the the key support term. last strategy our from long in XX days, we've over brand several of positioning Aside executed

the X continued customer we of develop active Victoria's has PINK loyalty understanding example, our Secret For through and multi-tender our for which been program, to year. now

sales XX% drive and understanding of who we're seamless our basis. insights turning members on on world-class our a customer customer experiences. into million XX of focused data, weekly Through our have We

well with Sports in we that of on new and by swim a Flex as March, available Flex latest also collection, sports pieces leggings In our with We leggings. In Sun Max, intimates to as continue archive iconic where modern and all night ounce lightweight has bra the colorways compression rating in new new swim launched padding. of are innovation designed celebrate relaunch an variety our April, by campaign The collection swim way. our newness Featherweight a Escape Elevate bras technology all supports launched our as focused Summer new customers. invisible collection #X and introduce shapes to we that top to our styles Body been offering with ready lift or without and a to and beloved our as well featured design our our in featuring of bra, smooths, styles and day fresh our heritage bra Victoria

wings, new terms Frankies Bikinis. is glamor, expand Aiello. In we collaborative the celebrates the we Secret asking Pink back fun, runway, lens swim reimagined property our of part categories, been of the share fashion, today. XXXX. and a our Francesca for. May, the lens label, under thrilled Victoria's commitment founder have year. all later As Show to Fashion are powerful Creative The products in show this We're coming Frankies, PINK that customers we of Director iconic modern reflecting The this announced brand deliver to iconic through continue introduce our will what entertainment, to precisely who through

the and merchandise quarter. We're and with our retail optimistic the we're Secret growth business on environment near remain a signs are albeit forward, position for a May was our multiple broader enhance leadership encouraged the product some planning the North focused the April around in market we're term, seeing and PINK, loyalty initiatives strategy the America, in the core course, brand, drive look solid in accelerating business, our customer conservative multi-tender on start Victoria's second enhancements caution by including program. leveraging about reimagined of month to experience business by new delivering but to digital way to in and our in innovations positive we an appropriately of As

pressured operating this assumes For be performance forecasting sales income range low and the could remain decrease we're half. million we're we've single-digit the America in XXXX. This range the $XX start the to sales, line to the and forecasting forecast quarter in of tracks second quarter which first in quarter second to in the $XX will promotional the broader intimates of to with million. throughout adjusted reflects quarter discussed for the trajectory second to of market remain XXXX, North compared XXXX, level of At

year low to be to forecast about our down digits we're XXXX. reaffirming sales fiscal $X single billion XXXX, or and from For expect comparative fiscal XX weeks

throughout trends of operating income back the this XXXX. of sales, $XXX be half Our to million improved level that our expect forecast At about to $XXX forecasted in assumes million. adjusted we XXXX

health of outside and ignite second, strategic as accelerate business we've we long-term growth; company. transform the mind, foundation consistently the to the our inside remain business the to to our core; committed our to priorities: in of firstly, thirdly, shared and with Lastly,

convert the you. that you, to to take look Ivy. year, unlock into balance than our our influence and initiatives the opportunity long-term this to any our be into And our the committed position have. Over market At significant we you growth. Thank to financial we're of questions to time, happy comments. cultural more might we'd prepared leverage As leadership concludes designed

Operator

[Operator Instructions]

Siegel first we'll the BMO our question, line For Capital go to from Simeon of Markets.

Simeon Siegel

thoughts to marketing you're returning. year? Martin, then speak turnaround just I strength Did speak shift PINK comment -- and doing the mentioned decision? marketing well. -- nuance. work did anything imagery all Any you well? to of and Any about is of could this the show include thinking Maybe April of change progress how are PINK? you you're the a come hope this thinking the Just messaging? as you to in to How about signaling you that a fashion the the more stabilization

Martin Waters

one I'll take Thanks, Yes. the first. question. second Appreciate the Simeon.

merchandise, strength So long driven and for We some was strongest yes, had Wink we've PINK a time, with PINK bottoms. new particularly by flare April. bra, seen the improved success was that in it in frankly, corset. performance definitely month cinched April in

was mentioned As [ good. have prepared bras big. I PINK the ] Sports Frankies the in and been remarks,

across much a improved So had PINK board, April. the

still underperforming announce It delighted asking Instagram. to pretty you I'm was of very it TikTok encouraged May We to show that the say it in but by followers one that, we're video to a always go getting response XX% was And so that be progress. Thank also to is Victoria's. X And on post, this some really making new the about honest, We our positive. a to It on and fashion way we positive. We that. But subjects. in weeks. XXX,XXX picked like XX% on favorite there media had coming year. show, get #X is for was TikTok responses back. about up strong feel my PINK. our positive we're were encouraged X.X billion in don't incredible following We impressions

runway. of and of it's I lens about as going be today. marketing of be -- the of going going be be modern to to going wings, be who of the terms feature all entertainment, to said we it's fun, the show to the show, but It's positioning are In earlier, the going to it's fashion, glamor, through

of mainstream needs throughout we that our It It's used will driven. other funnel joy. show linked to kind That's and just before. the going to not into top So fashion people about all-important less not sales merchandise, headline to we've show a on to also It It great not important. kickoff season and biggest fun. merchandise be a focus merchandise celebratory be our holiday business. filled element but our our it driven. picking that's will holiday It needs up campaign. And It's needs used the repeat with of performance to be for ethereal It enjoyed be, the it's exactly to of will to commercial, perhaps difference fashion the be moments investment, people. kickoff been be directly the most be who holiday the the to that campaign, halo single of the historically. than

So I to of that what you helps is some trying Simeon. give we're to hope sense it that do,

Operator

line the from of Group. Telsey to Telsey go Dana we'll Next,

Dana Telsey

and think perform swim Body too, trajectory? the Victoria. of see that how did by panties in the on about Store category you new you launches, reintegration and you Where versus As like the And How did some did intimates What perform? Future? the of the then the product category, obviously, are swim had you've base?

Martin Waters

Dana. you, Thank

I I at questions think least got X there.

I'll see them can -- if me Let all. I capture Swim.

about we're swim year. year-to-date, to So right we last now, if take flat

which been up. swim we the and late. performance era our -- was that been with in deliberately Frankies PINK is recent We it's last more. years, with the tell area driven going on merchandise been swim. catch more started for on explain that years so delighted you has across strong. traveling people post-COVID will tough we a but by Swim I'm April couple has couple both to playing But and Victoria's swim, of board, However, flowed were of really vacation the in terrific I difficult hard the later, in

So years we've perhaps our good. Body focused mean ahead it collection across in the really collection launch for a of by stunning our in I new the and and bra strong. that's on day had the that is that relaunching most board with comfort. and the was Victoria, so the very And important #X entire last features line or some really brand, performed big every expectations. moment X

that good. was So

You asked about panties.

on structural months Greg significant his improvements of the key traffic panty the business seen focuses their as and of could year priorities was the to as Unis We're in It been for took so. was a far business a strong a one panties panty very driver We've business is promotional business. be that April ago, as in last quality Our to team. When to promotional over strongest It category, in and one make the you leadership worked we've it a or panties, together the be. key our about about from strong while. for not X with hard It's the of know. month have it. very embarrassed the they there was

to that's of with So been rest might my to I the focus. really I that's Store And you, okay. go go a if big TJ, Future voice. area of might

Timothy Johnson

the Absolutely. question, Thanks for Dana.

opened stores new. to We recently of have in been performance Future in the Store of by that and be stores have as that been continue many encouraged remodeled the

opened many XXXX. new not in yet have We as stores

So opened those stores or XXXX. remodeled monitoring touched, we're in we really that

across We are a done at experience cost. better outperforming the creating work those We're and fleet. customer shopping it confident are that that doing messaging a getting lower the for getting we're stores the confident our and and

Future continues So the improve. Store of our cost on to

several year activities but stores less. do do -- this many we fact, year as million as many or it In this we'll have many touched as for year, last as dollars

good very with we're feel that Future. about making the of progress So the Store

XX% international in as this XX% we new we year business, year, Store or XX% exit of North of exit the As our and the Future format in of Future about about the Store our we'll equally of the new impressive our the we'll have America as stores in in fleet format. have

short for has been amount well done a period Thanks of question. significant a time. work in very So of the

Operator

Hutchinson to of from go we'll Next, America. the line of Lorraine Bank

Lorraine Maikis

outperformance TJ, to on the if we in that of the these as ask quarter. I for wanted are growth first cost And to SG&A the year? rest about something savings count the we model can start

Timothy Johnson

Yes. question, Thanks for the Lorraine.

I really, probably think may journey months the or you step ago, back, we taking recall. cost on a more started big XX

back, brought down really tour costs slightly were year-over-year. that until reimagined XXXX, in same VS third show our we front quarters quarter the X world from with XXXX, really up all that cost when in the businesses. a the wasn't year and story So of half and fashion It PINK of perspective, the were

And we've that prepared period the SG&A about occupancy to we, think importance an time. they on journey when comments, that in along of the an in our mentioned last down dollars, been we is were mentioning So with extended year. for buying

that's the that's first on on which really, down was So 'XX. 'XX, quarter down

So across has keeping a of check cultural good organization the work now. somewhat costs long in runway been it's really and been

we'll in the costs that the diligent SG&A on by with initiatives balance continue of the average great teams work is comfortable and to sold goods and in on sourcing vendors. So the and addition on very cost merchant been we year line this lowering partnership I or the terms occupancy both move our unit done as in And and through the that's feel line. very separate buying cost the of be of product to

business setting So we through. a setting trajectory America the for for up about flow the we on, in nicely costs really the feel up the in trends goes keeping improving very the nicely of as comfortable that year business very check and strong expect North

Martin Waters

TJ. Thanks,

Lorraine Maikis

follow if fashion the could show. on And then just I up

similar year, cost or it marketing tour magnitude? third quarter we of is of expense? As that of see the kind world Or decrease about the cost you last in think in the increase versus that would

Timothy Johnson

Yes.

that tour months I last tour this lower the work many the cost to come world round a fashion many countries, probably the Again, think mind it's year cost year. fair spend, to cultures of together. and keeping XX in XX will show than amount to assume all be world that took numbers different significant in

assume to should at in lower if we trade-offs that, it you a just come -- our that also at the said Having make look versus in cost. lower that at So tour, it's show will in fair fashion cost. Having -- show come fashion a said world business.

of both that with line. in off year wouldn't of to we're So holiday to the holiday those through that quarter. make prior probably should for support you sure and want I bottom in dollars, funnel point, than launching range top kicking to performance, the want the to flow the as We show earlier and all fashion expect the the really Martin's funnel lower third supporting

we're out on little to expansions So have a is marketing for a changes, just spend the not newness assortment but one the still year merchandise trade-off the in the coming. down year, be we sure at of will across We'll for flow-through get bit be doing lower and we it's can total, because dollar to dollar we dollar the think we dollar which some last than other. to looking want that everything make or word

a marketing a it's from picture holistic perspective. So

Operator

we'll line Sachs. Brooke from to the of Goldman Roach Next, go

Brooke Roach

promotions get cross are to relative traffic you the seeing these the of initiatives, driving beginning store? the engagement price customer do to shop you And the to rest assortment? speak to as customer they response Can level full you're in of

Martin Waters

that for you question. Thank

promotionality of keeping level bring in into but nudge with up shop. promotions is people we won't the that it's with for customers a who see way it's good how the say we happen, I -- come whole. a And What It's market Our cross have they experience to year-over-year, do pace us doesn't yes, as total. it just a is business rare in, coming promotion great as customers the and years. them They're any of or X bringing the a seen are the time, of to else. Generally, we new way customers into new XX to the drivers nothing the at file XX% impact that given months take meaning the business reconverted, haven't are a whole. in of advantage XX% promotion about into last the box to

So promotions important the part an of mix. overall are

think probably response that's I that I about much in can to as as question. say

Timothy Johnson

Yes.

that, in I I to the pretty environment understand, test it's Brooke, think to and important addition think control have a in we rigorous business.

dollars. are make promotion sure testing that have promotion, do have a stores that stores we sales both it's that drives don't to gross good margin and and So

to where one beauty people did some that's stores, second get particularly I traveling line. the did the we a better. think And of noticed in in saw you the that the is you think lease April, as you're along promotions month use promotions mentioned, whole point. And from beauty of box perspective, help get I Martin point our business and probably year-over-year, across see following kind more we

get X lines by all perform business. Both and saw -- PINK You evidenced best several better quarters. evidenced in month of as brands

to the but in whole promotion way necessarily wasn't just box across the example, we're driver make using as the traffic PINK an it the rise. business always mentality the that So

Brooke Roach

this half sport you How plans And that one behind in quarter? then the reaction your the the you marketing does that for inform back year? campaigns of customer Can for to the other Great. executed to support the you. question business talk

Martin Waters

being about We business Yes. overwhelmingly ways, sport. has sports Thank X that positive. you been maybe question for response us the ways. see X to The in in that

particularly compares significantly, our are to sales prior up First, sports driven year by bras. significantly, very

system. Secondly, during in customer And uptick be a the as the is will more to part like But a put exited, to intent the very business that have we us, business. were business to sport that reaction come And as give August is get whole, behind that real reasons have our marketing now taken most to third us. market have a we've I is with that And that conviction. I has have promotions, category categories a we halo informs said, than doing that what already to the part particularly the more longer conviction got response instant doing positive sport liked. we bit, our is across social strategic the into wrong into to we for we're in the to right is media as seen we broader wrong sports amongst the it so we well-shopped business. It's but our of do to out of will know, frankly, of would we're now see the which say sports that to share with encouraging. bras, July and back even like an positive what

balance of be more would the of for same I the the So answer. the year, think,

Operator

Ike Boruchow we'll line of go the to from Wells Next, Fargo.

Irwin Boruchow

at wanted your promotional just the you TJ, embedded bit the I'm you're you're interested your trying for about [ both of understand planning the any a time? what's pull to setting baked into back kind just on the in Is Are intensity how to second quarter more can plan year? most And seeing? right? guide? of in I promo really understand and ] level you talk again, environment. that just little to remainder Or

Timothy Johnson

know and across lot I a retail. of Thanks to been there's promotions Ike. for the lot attention Yes. question, a paid written

sales and I year-over-year mentioned. and Martin those perspective as brands, think strength did in rate affected quarter across was from evidenced the our impact the original as past business gross in guidance by level from margin our driving our perspective, slightly a the first promotion

confident in we're a it good due was So quarter. first

we to thought environment and through a we second last anniversary more move year. quarter, we was what start As third promotional

move don't that, as first we compares margin probably year-over-year to the for letting it's start reason we think the move our And the is environment So yet in were on fair said season, gross forward I they be think it's as up rate promotion. that quarter. Having won't I say appropriate fall the the noticeable as about to I us assume think into as on to general. And could media to which, continue we'll national standpoint how election challenge move cycle, the head from know, we a standpoint. and as our business to fourth as challenge between and from retail to challenging consumer again, in Christmas. year we into the continue we then through, be going shortest in or into We're quarter, a time you this the calendar a Thanksgiving break had

So the shopping day be days and and each the importance more of compressed. will more

be newness what more We've So that what our from dollars. in delivering I foot does of feel imagine environment off also. that the feel comfortable hopeful is -- on taking what us to inventory inventory in managing promotions going promotional newness and this from how comfortable and incremental by doing we're of only suggest And from of we're that, forward. Having I as our what's grow the tested on going to and margin mentioned, the here is standpoint a something quarter. perspective. merchandising expect in we're pricing it, more the we guidance very driving first incremental sales And think a it would front learn difficult that grows very type is focused and just gas in should we we're gross said we evidenced as as

business. very So in margin about we inventory comfortable managing how feel we're the the and

Operator

of from ISI. line Lauren the to go Evercore Slade we'll Next,

Lauren Slade

deeper something you to China. bit the structural is if know a on wondering so a give here, structural? Is I U.S? international business key outperforming there's the from could learn Or some especially of you this differences. why was are apply I and there diagnostic can in lessons that significantly little

Martin Waters

I'll to China. Maybe Thank a as and deeper that a then Yes. you international on question. little whole go context some for give

businesses China. So where our took losses was international strong. one extremely that for business been those we the for the continues we It decade, had we markets eradicate When were this of both strong but was structure over, X team U.K., the of challenges, to management changed a be seeing. to has one

now of the from to X so world. strength the stores in has business at And XXX areas gone business. We're the all around nearly strength

count, We growth And seen I can we've have of sites. retail more remember sales and system-wide than sales. digital digital to sites excellent multiple tens in

I over countries. countries physical think see. presence, we're shipping that And excited we a we're we're XXX the response with and about in XX to super

we response. Just launched a ago, couple Madrid, of a store in new weeks fantastic

all the performance we're world. popping about on around very like-for-like Wherever strong brand which also the strong encouraging. seeing is up, seeing We're performance. So a basis, just is

So this we partner on new and to physical stores our XX continue retail both network. focus through will year digital, about

You're the over We've fantastic long-standing was partners in for And intimate and structural right business big which decades. in apparel, in Miracle, made business. That important. retail them a experts The China, market We with change is than world with been that out in we base domestic Regina biggest be of China markets. generally, X share XX% very a in point international ours. way. much market being from of we're our partners, there, market as to decision and international the that was working we higher partner the to share. fantastic was can a command less slightly brand both low elevated in in promotional the experts price business we of easier single-digit the around from working find an change. We single or We base do than XX% the in domestic a

exactly that's same. the color merchandise, to would thing mix it's some to similar. under of overall And brand eye, some curve, some the difference. The important most people say the presentation variations, the I category differences, think the a covers, around But untrained of big So are particularly remember is focus. there substantially in around size

our international focus focus on of PINK in Glamour. on We a a have less more markets, of

and So that there there definitely XX with many years from beginning. team is the members team that differences, old being are of now

in to better gets better. and practiced And internationally very market how just team the skilled, so very and

We than a we a years So flagship And Next, because that and up doing. team to being loss next year. partner, partner. we is do. estate flagship occupation, where about in our new do. nicely them making close to of the delighted They U.K. buy and be better not lease They shoutout we've know China store was the Bond Street the they're real open XX had well, big a profitable. from than to business for is better that fantastic everything London to as on our moved be market we'll mention remiss I'd be to store

So an the milestone brand. exciting that's for

in all is asking. positive very So you very, international all, Thank story. a for

Lauren Slade

a data utilizing then new how And insights? terms there customer as in in color. the see may we you're useful really What's talked the rollout. my little remarks those follow-up, hopper in the loyalty of getting about multi-tender prepared leverage you That's from bit your

Martin Waters

Yes.

releases areas. to adjacent noncustomer So We've ago. in on of the I is And the beginning had which mean And data, business facing. customer Christine area are if of insights. about I months take of is that digital Rupp releases and data her we've those are new customer each that good made since our primary across QX, focus XX progress incredible joined experience. enhancements, we've question insights, XX facing. new had XX

years our and in competition competition environment, digital of a over our important which So marketplace. share we've seen for new that particularly last generating of the more customer most sites X ever digital which stronger the interesting is than our of is all the performance, because we've digital activity is is more driving releases, had. And all the and that in

that. by encouraged we're So

that moved our customers a from business device arrangement our of XX% sales as a And which XX credit million through card that, multi-tender that's and something like on built advantage know, you we about how beginning taking to to and platform Specifically future arrangement. loyalty, gives of at a the to the in say we the of to audience the on market of tremendous this a personalized. marketing world will which that beginning learn. but I basis, would be on personalized of us coming we're around country

for that's so And a the strong with a understand And having where give them informs new experience. a to curated preferences having individual the you and opportunity relationship frontier very us. [indiscernible] customers their

we're I the at beginning. As say, of beginning the

in capability it grateful last that I so. see team the because very area that XX that working I'm we enhanced we've significantly that have upside so And our in have arena. in we on months or the

Operator

Jonna the Next, from of to we'll Kim TD go Cowen. line

Jungwon Kim

to see nice was [indiscernible]. It

remainder for expectation update any So how business, would expectations? what's Me on also Adore And love your that's the versus get for that tracking particular business? the to your

Martin Waters

didn't Me we the Yes. first question. the Adore but We got question, get

repeat you first the could Sorry, question?

Jungwon Kim

Yes.

PINK the on expectation you've for business seen that of evolve? remainder your improvement Just the What's there. business, How year? will

Martin Waters

Would none say Sorry, business about. about? it you're slowly, got what business talking you talking of you're which us again

Jungwon Kim

business, the It's PINK PINK.

Martin Waters

Got it.

I'll Adore question first. the Me take Okay.

is Me So yes, Adore well. going

on the growth income. For year, sales for and in we're track operating

year on technology to reminder, work set We closely of continue use synergies. marketing team and at the we the to with A beginning out the very X synergies.

to was do Adore and Me victoriasecret.com first a The so to drop-ship environment. sell in on

arena, strong broader inventory, gives we've than our before. carry kind point done. gives So that to Very inclusivity in size us performance had we and price before, had don't we've adds access marketplace, different curated to than of us fashion

So pleased with that.

we should were mentioned previous Second have marketing the around that Home, And data when synergy in was very talking about Try-On initiative. question. I important at

will We for of have off exciting marketing other last XXXX. on subscription Me which platform. And later will very -- Home that months live innovation, loyalty-based thirdly, then very, will and in the test this mode in driven we Adore go at like of features Try-On interesting hope year, that, that member be the been services, a couple come

are side, business the anniversary the second way our business. it's Me we the we're get good of going. And performance seeing from year from and in of with a core stand-alone ownership things it's the very of year, whether where to Adore we're whether on that the or Dailylook end pleased we'll as that So the technology

opportunity The incubator that's an provide other interesting they us. Adore for is Me about thing that

the AI GenAI, us Adore So business technology-led particular, and Me is in the up agile, back end. Secret spare. can the environment The small, who about typical pick think into and and learnings of on that as test for kind we can Victoria's tiptoe

if years we very delighted the confident, youthful, we the pleased evolving, X years and when to didn't as with the ago away customer the identified turnaround want in strategy, customer could We look the problems be So repeatedly that Adore Me business we're been who core X PINK, are -- say, of as how like assortments had had of it's to collegiate, optimistic a about when we have is. all. it that going. In we that part got that have from business, family not more think off-color our things ago, and at

team the So have rebuilding. been

around watch been see for give what in the us, We sports in place evolving, place collaboration, months, see myself, across and that of you growth the would used that have talent bottoms doing XX brand. and us, new in PINK good and they're from who've have which reenergizing performing well. and costs Collaboration that confident confident are would where I board that are categories shows say that and are we're company. I the youthful, you last the XX, optimistic. up That's words to merchandise repeat and the evolving after the strong. really getting and X bras, was optimistic, it should we sleep Frankies the We best very in for points [indiscernible] flare to entirety

the More the So do, whole, rest cautiously of the in and remains a the team with into drag doing they're that very question, optimistic it on year. as go how pleased a as company we no environment. but to

Operator

to Next, Morgan Stanley. line from go Alex the of Straton we'll

Alexandra Straton

and Martin TJ. Perfect. Maybe one one for for

after some sense upbeat I'm change then, pretty trend So Martin, the year. on improvement notice throughout North I just And that digital market TJ, you did last declined the year-over-year in noted impacts here? what the Any growing sales it view though from then for your if America. and intimates result, magnitude? enabled wondering

So can trend you help the just me in change there. understand

Martin Waters

question. the Appreciate Alex. Thanks,

take the share I'll question. market So

one, improved. overall headlines about that seen in quarters X X share. are mind past market for Number market we've my there the think the I decline

Now first some noise so week around Easter and XXrd the shift there's and quarter on. in

but a turnaround, massive prior it not first better. but year, definitely it's to was undisputedly, a brilliant in was the compare better So the market quarter. Not overall

flat and down would sports first earlier, digital bras nudge and solid headline said as at are and in stores remember, remains be, the upper can the I takes There as performance as nudge bras long in within Alshaya essentially panties. XX%. puts Second some I and for time showing growth

period and be month-on-month strongest a April, the reviews the I time. of really want The of market market the March performance are while. MARPL we to that good we've which share. It's third call at don't But and performance we very during market both was headline encouraged around our were period. looking short a would in get MARPL, -- seen into the during what

the like anticipated might not very it end this happen we'd of So in turnaround early the it back that looks that pleased year. we're days, market until a

So hope Why sustains that were at it very I mean it was from surprised there I be? and decline here. all. builds that would we a

intimates that that seeing long we've -- in in the decline don't the run this business, I've remember been Over years, XX market. been in

have going So the return situation had unusual to far it's on in to detect. can normal. we world hope so it's a overly I and as at large decline Nothing structural as

So say. a probably TJ?. and just correction normalization I a would

Timothy Johnson

again, trends Yes, the your a -- on second throughout from total. question, Alex, the much as as quarter quarter really digital perspective, looking at in

month Again, direction digital trends a supporting quarter. the outperforming positive April the So in and throughout move the was saw biggest we stores. also

digital seeing mix. percent of the So grow a we're as

QX. we're up obviously the through changes, on is As Martin what sets effect QX, of cumulative mentioned, that us for again, build customer-facing well seeing volume the

receives additionally, just of an we based the reporting from sales actual as really across on when the end I recognized quarter, think come we it. standpoint, the customer

we is, the get end on business the sales recorded happening got retail Those of we likely product. of when basis, customer the as that through importance in again, the move a see May the April. at the could quarter as So the stronger receives

strengths there. And video, a is a home enhancements Try-On pages, mentioned at months and there opportunities up the feedback landing to to over just number site built the of clicks in then, positive invested So volume show the whether in and again, we've timing category, [indiscernible] Martin and little just the now starting of and or way Home a removing shoppable in fewer difference are results. bit that on it's visual coming search, of

So we're traffic better in conversion, seeing up again, it up trends. that week-on-week, We're in show improved month-on-month. show seeing

of you business, talk we know that about or what year. is of building So kind us we're the that's optimistically and what hear pointing what seeing to when will we're effect balance digital cumulative really the support that the currently

Martin Waters

Thanks, Alex. go with question. let's one Ivy, more

one I time we think for more, please. have

Operator

Our final the the of line Shapiro to will question from Marni Retail Tracker. go

Marni Shapiro

And a new your I And shopper of and -- now feel How the PINK there. curious in? I'm curious about balance the there? know that PINK you about think more notably year? Honestly, think half should bit better. you off about part about Congratulations. do the colors we versus come seeing talk intimate the last PINK? I a comment a you look color has of inventory significantly different, is apparel you just little though. been Are feel apparel loved is I in bringing in if the I'm back level shopper balance because the Are conversation could you to the how and the about how big where of

Martin Waters

your encouragement. always, Thank Marni. as appreciate And we you,

that other pleased we is you're across than and all those would the more tell I feedback us Marni, track you. brands. are For not, PINK know, gives performance don't Marni that And runs a And right real-time fantastic that categories. in

apparel business good our been business intimates our and been has better. So has

that balance might suggest to the right those adjust. You're X between

is got be thing It's We important buy. apparel. most got were in inventory had wasn't the brand in shops person's good think that She multiple at had It and overly we apparel, became a because intimates fundamentally PINK apparel do. and long in and franchise I less to categories. doing of we working. apparel. And primarily we We we change to into to underinvested less that's young apparel. that. what through the self-fulfilling who comes got

So important, you balance of dominant less intimates that apparel. on still see think on should the more is intimates, -- but all aspects dominant

for customer. The & news particularly customer, the good as we GenZ is Victoria's Secret very news a Co on on GenZ. very, over-index very, do, good clearly, Secret. really terms Victoria's a We that it's In of -- whole

has are just get we there. It's we you coming brand So customer She a inventory and we're conviction, in. unfair merchandise, is got the advantage. coming able Victoria's to in confident behind that to team curiosity see us I what it. assortments. And more we're she being putting an the the gives we We high and at as it of PINK doing. merchandise get deliver for really, results our know, should about get all be really we same the for If bullish, said, for more Secret, the as feel as I on more as compelling confidence We're more the time.

everybody, thank again, it. this Marni, your We you, So encouragement. for you, morning. And thank your for calls appreciate

Timothy Johnson

your interest appreciate Thanks, a That call concludes Victoria's great We in this morning. Have continuing everyone. day. the Secret.

Operator

of Call. for Victoria's First at conference. disconnect Quarter Please in the Conference participating Earnings the Company today's Secrets time and rest day. this enjoy Thank your concludes & all That XX you

Victoria's Secret & Co. (VSCO) 6 Jun 242025 Q1 Earnings call transcript