VSCO - Earnings call transcript Q2 2025

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Operator

Good morning. My name is Amanda, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Victoria's Secret & Company's Second Quarter 2024 Earnings Conference Call. Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. of & Reporting Company. President of Investor Vice Secret Victoria's Wynk, External and Financial Relations Kevin Kevin, may you begin.

Kevin Wynk

Call ended Thank you, Company's Conference & to Victoria's the Amanda. Good morning, Second and Quarter X, XXXX. August 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 statements

Johnson. Tim is: CFO Joining and me on call CEO, the today Interim

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

Timothy Johnson

both quarterly first the stores improvement for and results in everyone. the financial results for in income sales I'm quarter report second and XXXX. the as were our North that our channels. fourth continued met delivered time our since in or encouraged for improved by trends America exceeded quarter morning, Kevin, we We year-over-year and on growth digital sequential all the good metrics, pleased key to quarterly Thanks, operating sales consecutive expectations quarter

evident apparel Sport our introduced a end year Secret steady end at stores the were of new the broader and and X% in event second the merchandise last Back decrease launch to in improvement Dream of and continued to in Friday's the Max May. $X.X Bra consistent, of late-July, of improvement collection, and the success in expectations stores in of quarter. to Momentum in the our PINK businesses. customers April Front-Close with our merchandise events we America, both of VS digital. Sales In digital quarter deliveries with assortment Campus XXXX responded in flow as Featherweight Victoria's first particular month through Bra of a North for trends to our and the for in was quarter into at our experienced the better billion, sales Our

units collection our anticipated, semiannual the sale We PINK in last time Bra sales particularly apparel. in in introduction in apparel we the July, than with quarter Back June product with by our strength balance VS of Sport. From which a lower perspective, Victoria's outperformed during saw improvement fewer newness to during performance Secret late with frame outperformance driven on in Friday. period As year, PINK consistent meaningful Campus for July and of growth of traffic, driven and the Stores Dream PINK the mall was sale, Friday event by in the steady experienced

bit reported on in digital Intimates quarter third-party America first overall market indicates in our the during particular fewer Market second data the a in trend while in the In got our semiannual were down sales was levels what last year-over-year, terms a sale year, than traffic to perspective, period units and Digital we compared in up market sale when in was the the little North in in channels. From improved the the softer quarter. second had the conversion of quarter business, quarter quarter,

older market a best points a Beauty was the Merchandise available appear stronger partially sale Category business or of Sport the to XX%. in our share Sports in our stores continues of QX. be and quarter improved the gaining in PINK as Secret both fourth the for with digital trend quarter, Our Bras acceptance overall share market value throughout both consecutive were for second bras sold performing remained to -spring quarter. well and category increase market slight share in Panties, consecutive with decrease encouraged price categories. VS most our channel and in Secret, grew combined see important share. From an and panties, our category We Victoria's year-over-year merchandise Intimates for anticipation where innovation in market In share newness the an or followed major event This the Bra by season. PINK's in styles in for perspective growth and sales offset along quarter, low the and down-trended by to at were increase exited total several overall Victoria's legacy during in in be

online. newness Specifically, third quarter as Campus we the product in apparel, to start we to in Friday ended the quarter. continued PINK to This during response improving Back by stores into to strength the in and customer event the event late-July our August continued were Campus as encouraged Back

challenged leveraging adjusted sales disciplined improving opportunities our SG&A coming dollar Secret growth quarter. International was initiatives the also second points and of margin adjusted in year-over-year were franchise and the down retail economic single-digits experienced guidance our competitive, rate strong the PINK, and improving efficiency XX basis gross last China, retail inventory by in our dollars to the remains gross North international environment disciplined operating in country. of drive challenging our Adjusted about sales, the partner due Me. model. and Next year partners the Victoria's around was product and in in margin our driven year-over-year travel the Adore for compared profitability with optimistic in better the our growth points to growth in line our and both the where and with we led top grew and were management performance than expense to trends softness expansion in overall addition in by business proactive quarter, within acceptance for profit incremental we to In trends growth basis and all America but promotional U.K., XX environment world. The management quarter to for our partners, sales and high We're were and market

we recall may our Investor are of transforming improving the believe and structure million our have established we to focusing track goal. and of at our demonstrated company Day, a committed we the $XXX to You efficiencies I our foundation and on model exceed X-year our goal, commitment to that on within cost business.

panties actions several ultimate Secret the Dream brand in from newness Aside we've for and July, XX over collection, key the strategy including the bras, maximum introduced in a a collection everyday support our financials of and in days, Also our long Victoria's an launch with last the term, positioning experience of we beauty style executed the with Featherweight in top-selling to of of now and maximum Bra July, added comfort. launch meets we comfort Max sexy the the support closure. where with sleep easy that Zip-front Front-Close, the new combines Sports

launched VS the Tease Beauty within Collection, a Tease. of we brand, version Additionally, the Fleur edition limited fan-favorite Sugar our

and August. We our Campus of continue PINK July to of with weekend memorable meaningful return in including celebration National early Friday, the Underwear the customers to of and last connections the with Day head as the customers, get collegiate Back create ready our

year. been amazing Wings, on October with have Fashion, are And understanding active show's a will Victoria's women. The continue PINK heard for: precisely an Glamour, Fun, cast return develop what further who is XX in through of powerful of Secret reflecting all our modern a asking and Runway, Show customer our that Entertainment, today. we may has just to York over deliver through we program, New for been loyalty lens which Victoria's customers talented our multitender Fashion You returning Secret have City, our now

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

balance several all-important season. a Fashion third traffic forward, launch moved VSX business planned start continued solid has improve look we our return encouraged performance customer of and Secret stores. As off brands. have the North of including the business quarter, for is to and Beauty our Early the our continued driving quarter. the and Strategically, events trends Secret Victoria's feedback America major encouraging through our on is third And for assortments we've August we're kick PINK exciting Victoria's as fall we of to holiday both the Show have the to Sport and

consumer our our some multiple improvement financial our raising to fiscal outperformance initiatives level in fall longer reflect and spring in and XXXX, we're that modest delivering we challenging, to optimistic pressured economically. original we for our QX term. Today, what While drive the assumptions. expectations we business our over growth is about is on customer Intimates business, environment positive and signs recognize remains seeing can which in position leveraging we're focused in remain our on our market are forecast control, also of and We to the

compared been we compared and down $XXX our XXXX. At now this down of For the level expect X% in prior comparative $XXX weeks guidance $XXX approximately about we've to to to fiscal forecast with positive million. be tracks the a million of expect year, international to XXXX, This in continued prior along trajectory income discussing to guidance throughout XX with in North low million operating strength line sales, to improvement forecasted single-digits. adjusted XXXX million reflects sequential we our in America, $XXX business of to sales from be

guidance $XXX free adjusted $XXX to million now approximately compared cash million prior to forecast our of $XXX XXXX million also We in million. $XXX flow to to be

CEO the forecasting third in Hillary the to time, Hillary and take chapter. Thank And Martin we sure next $XX also concludes effective questions. quarter we'd announcement level range us time we're And are comments. this quarter for operating excited you. compared regarding be the take That and you to recent X. prepared our sales loss we're increase of to last [ sales of his our thank low company of our in the again, for the Super appointment $XX million. And at we're ] to next our with For to into finally, Once at quarter want as his happy this single-digits any third to XXXX, we September adjusted support, year. sales, third a forecasting of million

Operator

comes [Operator Fargo. line from the Ike Wells Our Boruchow first of Instructions] question with

Irwin Boruchow

TJ, results. from X me. congrats the on

first, real Just quick model. the on

could you're margin talked there. you tell what the international share the year? And the you're for us promo You plan? just like I'm confident of Can maybe seeing sounds international outlook into half what specifically. then back with most quarter what kind from of you're your expecting you basically high you're curious segment and elaborate fourth the just in you that about up It the on environment baking further can us promo/gross singles.

Timothy Johnson

the question, for Thanks Ike. Yes.

our be all around the very continue First international business really about off, we to excited very, world.

Franchise the our both Retail in well I as strongest remarks, Travel As second the in prepared mentioned were as quarter. businesses

U.K. there the the appear of the a in We continue in is bit There one to unique a partners And do well which to that very more in think, be softened pressured is, with consumer our China, our country international does the that at moment. business area don't I to business.

some Retail would perspective quarter third we the promotional in e-commerce an As in likely do I of forward, events timing national I as into well China the from pulled that some and there's are shift. partners on from expect the and third of in the look get U.K. events that Franchise quarter more calendar partners because same will the in nature think our our more Travel as

We're assumes in business. From to business it year. and we third China our third more that's think bit in promotional, guidance little do fourth. need So at to continue quarter our quarter, fourth think half quarter be incurred prepared the drive the But be largely shifts I international we've if to our will outcomes. that here be perspective, of fourth front better the a much as look the of third promotional. than quarter and We promo same to be and due in around a the might calendar for

I think driver. business. much, of gotten business with as areas traffic what utilizing much is, I business the the a has mentioned key sharper Beauty the

terms have also we business inside now us acceptance program, supporting in traffic data, reaching us level more customers shopping product are growth really our our be we're growth. spending of sign as of driver. Clearly, loyalty the traffic more year-over-year. program them. our size that seeing loyalty Panty That's how year-over-year very is We're successful some of annual You've actually seen leveraging and a a and good for and

in the about back is really in each our think do items brands. the opportunity might in merchandise I early So most lead bit newness, of more traffic VS fall to the those the up promotion the level, have season. But to coming acceptance mentioned, and here think to X high a and I particularly little a drive exciting I of business the our to business part PINK

You'll the way York to when ago and laid strategy almost the and coming Day is a be from would newness to perspective recall that work in of we in something back our some stores now go be August; working. some year team the and starting expansion you that a and show the all up of Investor merchandising that would the in New now, for clearly, if coming, were out category adjacent here and it's July

So we're merchandise we're of the the We think for think about will the we very product the that year. ultimately, question. win process. Thanks excited day again, and in that. newness, back early in And half

Irwin Boruchow

down quarter? Could in the up fourth you say be gross margins or will

Timothy Johnson

quarter, embedded say B&O down extra meaningful a week rates. pretty else. we more fourth leveraging to it has would down Gross but last in model margins and be anything the because gross last guided you'll from bit, a suggest is being an the year. think B&O in the be little quarter little in results impact might extra is margin the a rate obviously, we fourth I'd quarter. And to margin a rate year, had in be week when on the an rate are principally compared our But selling about merchandise recall, I of bit had might rate than the up about down margin third

Operator

comes question Alex next Straton Stanley. Our with from Morgan

Alexandra Straton

you have just both. I for couple a

] said, or your I'm that levels? do just embed And promo for then category, the compared you a on helpful. at -- which for slightly that think So about I us was -- right promotional outlook just feel steady being brand? better just you more? you you where gave, are more the bigger right as it like Can know either the is follow optimistic, elevated wondering, up too the just still just the year, sales previous. like banner guys than back we half so or talk a little quick super picture, you color level bit guidance grown you TJ, to what you've to just a Or raised understand geography on state of [ that

Timothy Johnson

Yes. Thanks for the question, Alex.

stronger, largely of range the dollars. I'd in pushed the a bit continue raising an the -- the do great a say, that think or in year this in end elements the in model from of sales X row, managing was for particularly quarters bit I estimates unchanged. guide the year Where standpoint, the coming better the generally a up at are job little predominantly spring probably of got the sales speaking, a be to obviously below for some and margin expense would inventory and the outperform, terms cash. teams year sales the line the little and costs managing of balance

I early been in mentioned, encouraging. I has the reiterate what very think Victoria's -- Secret brands by, encouraged of product kind that both am just a I'll PINK I and from most what acceptance

waiting As for that for in to and well. I up period July a is were both August here intimates expecting, doing and shown inflection the been mentioned, moment time, adjacent has this Intimates of we in we've newness long categories and and

that that's the really, I tirelessly what has single on good been a the in really working of and team we're the seeing most that business, part think done encouraging job. has

year-on-year. color kind little of or the promo and a discount is general discounting a is levels, from up just think year rate our I true back half it of bit

this it's think, should believe and that ever. discount also forever true don't at rate we we I that be

that test to rigor do amount And groups environment, be in calls, we're have brand, around dollars. working groups I mean And across current of promotions as have is of where sales what of the environment. trial in is They're and terms we where the do I margin lease next what reflection assortments are reflection for be to our it's merchandising season customer. control the do site the that. I to going seeing mentioned on holdout coming like would to we teams the we'll or sure to promotional. or and this towards It's a and promotional we the of customers less we newness that we promotionality. believe have that sure is into a of a enough I'm a of and I by out I've could matter previous Promotions all making and think and fair are that accretive But this testing getting little that evolution important that year, think the to we highlight, less think we're matter. the a line delivered. the accretive holiday of

where and the sense. are all I with today. moment, promotional in So the make for where evolution like than promotions merchandising of again, would we be term, the we and think we are less a customer, we little are we the Longer to think

Operator

from Jefferies. Our comes question Corey with Tarlowe next

Corey Tarlowe

Great.

about you And So the of wanted I highlighted a feel into that is with that TJ, a back you the know you Could because in what talk ask segment? like PINK to working think newness look trajectory infused might half? segment. improvement you amount little fair about what And bit you've I that an there.

Timothy Johnson

talking because there's the Corey. to for work us of -- amount tremendous positive Thanks it's Yes. PINK to a a question, about get we've business in been And looking been here. the forward light

good tees, more Friday the August as in response. customer newness summary, well business the capsules the in deliver I PINK And to around seeing tanks, continued to we front for July, more think store, dresses event. and in off in start we're the of

but were the on and end stores amount July tees, If activity, the dresses tanks a of table, some of had of early early and business. August, you fair particularly you winners see the for think good front sellout about what

in available I'd have early continued well. sale. of remiss that has the season might seen didn't inventory the table And third You in different shorts through denim some for mention front the sell be I on types the here bra pant to delivered that Wink quarter, if

but I optimism the there think us the half opportunity of So to PINK. are into category that number with back more different move give year, as of we a Corey, come examples, there's

that store I'd For to as that be mention to if School, actually it we item. to and Back get I promotional backpacks had the and this drive started -- to use year a didn't customers remiss basket

Back backpacks and is teams novel pretty the idea, done against to a and that, job good School well been So for received. have executing a very it's

for think day, maybe every particularly know most in seeing July store, I of customer of in encouraging the a merchant one were and I end team that Back team. side and if very to stores the day, younger if but you're our of the was for parts -- PINK store not to our every encouraging you those return School, almost for stores are and

So younger XX- getting and you have to XX-year-old type August of in that late-July more saw back maybe of that in significantly age foot than that demographic, in stores our to customer traffic you in prior seasons.

lot but so a to So happening PINK, come. in like more about what's to far

Operator

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

to unmute right, may the need I'll question. You to yourself. All go next

from Brooke Our with next Goldman comes question Roach Sachs.

Brooke Roach

could of dollar look half provide those of the any efficiencies? And the in a SG&A as levers there? in you be drivers you then about ahead, growth that you you you're Could of might speak the pulling that hoping quarter. thinking back where year? to few the And cadence saw the better additional examples how you are of the SG&A cost finding was control you I

Timothy Johnson

about I asking opportunities of the and year. for the outlook little It our Yes. cost balance the second a drove and was of but quarter outcome you the in kind were soft, what think

was. I the of the outperformance what that's there one cost second think, quarter. think you Brooke, wouldn't were number any business. that want thing areas within in to it different drove I was a question the big the that

understand about control and in that thing driving under in inflection keeping and help best think keeping profitability way important, of into this control inflection they costs one is rallied regard. costs is we've to have can we point, come it that I kind moment the we're think is the that while as teams do around under this to

frequency of the how a ship it's differently there it's commitments we're throughout business whether a [ the travel to business, deliver digital monitoring or quarter. to are stores where our areas areas expectation we the terms managing check and monitoring different how we payroll have and every keep from what will number second we really continue headcount into and different closely of There So number standpoint able we're on change the whether our our customer in and changes looking throughout a were store of and that of are and expecting the in kind quarter, ] closely. or of third costs promise in at whether that here of distribution or dates

season the be worked to will You've growth to your the in compensation the much quarter leverage we not SG&A than is dollars potentially in guiding anything cost to there growth model and back expect in good the of sales, when fourth any the doing the extra the quarter, anything we as half we're fourth in fourth year. prior we will week business a as providing last account into through probably that have be guiding candidly, at of the else. flat than move and this That that year to year-over-year. dollars or quarter, the in bit differently the start years. you I'd more the We're last expectation And adding incentive point little year for about relatively probably than probably has for on differently we're SG&A

quarter good most the the around. multiyear part I VS&Co., feel necessary just what that's again, something this in isn't that has been or always underline about outlook. And X. after want been not the really environment it's but teams we've while. journey. new do, been just for have This that It's last has we a a we're fun the is this something in cost most importantly, I the of to rallied to This in. maybe something very So been that And

managing So we managing teams inventory. feel are and very good cost about how the

You mention, year-over-year. necessarily component And buying they of expect I'll would flat-to-down those in be didn't sit year. costs that gross the costs do and occupancy mention the costs, I anyway. as have we it balance the We down move business, but inside margin were through of and

around costs, So the a disciplines areas -- pretty movement the plus meaning from occupancy meaningful rents, terms basis. I'll working much better again, business of lower call on same all a some positive on locations getting and go-forward

things the have right at gone heading unturned in out like stone as really, right to a co-tenancies there's so cost direction. that, things from keep and Looking things anchors like no now perspective

Operator

Mauricio UBS. Serna Our next from comes question with

Mauricio Serna Vega

America industry the I growth like market, What the are anything segment got America North wanted particular? And on growth you that the to kind of third the in or standpoint, slightly business, softer Is understand were calls across board of quarter. Intimates a expectations second it what focus about what just about the improvement, want the the improvement? your Intimates from -- sequential for industry quarter then is for -- guidance. like a in just of like It I second it are like improvement. you as a softer North the Intimates driving from to think half ask -- that that for year? like segments mentioning

Timothy Johnson

at down line. a a big high third we quarter, use in business QX as for could I about When Mauricio. We've the on top quarter. third in X% stay and moment guided think level Yes. maybe round if low the numbers, for a growth to single-digit the question, we just were Thanks

low how to is we define X% X% single-digits. So

of that X%. if I the plus So take midpoint just at

about it we're the retail as impact. points happening going for calendar from quarter, remarks, quarter. In to of relates all about that what that's us year. retailers X third shift positive and we in is third talked our to really, this the is talking X% the about X% down plus So prepared And

example, would flat. calendar in plus shift that without X%, be retail my like the more really So

because So be on clear, basis third really might the from And on the down year reported shift to plus be calendar calendar from going about an apples-to-apples you to is down last again, quarter the X% we talking going November Again, basis, of to week from flat. X% of first move a X% will this a week shift. be year. the into -- of about

the I core here the know, month. as of you August. the in that? starts bit positive November, of you little big month can our some month, expect we're single-digits, a the better August in holiday First day underwear hopefully is of would National what's week there. To business of a to visualize not our already and of month we're PINK week ramp kind finishing holiday heart the that better, if to seeing to your on of our just the start will volume drive low be in in or question, view, impact Friday as From based business, strength of the the positive off going business then and

coming third So feel in the quarter anticipate what will results we live September, newness positive good launch And from year which all driving to sales commercialized and a product -- major about really major commercialized and be show, product, this drive, major, way. season and what's this at kick-off about hopefully, the that perspective in year fashion for August. kick-off VSX will drive acceptance, a the us and holiday is

slightly, Again, gets brands from would the North I Me Adore in we down think product America. to better in expectation the -- in Victoria's quarter what second America international Secret fifth third PINK grow a quarter maybe or the be in and anticipate to row quarter. over North Again, North And better. our a quarter-over-quarter drive year business that the that's single-digits do every continue for perspective. We do will in improvement sequentially business from high the to America, will or total get have we at closer will then, PINK, that think flat partners again, but and sequential quarter. fifth -- So the

it's think kind blocks are the be to but does to those there. for building I important calendar of shift accounted So of quarter, understand need the third

the part of it to domestic in here of and year guess then last But the year, we at softer coming of was tougher, assumption -- the of in what to the be to get in our business in the half better continues market of I'm we not half time, the domestic in quarter, question Maybe quite I month August market North we here has back any, market the had if year, Intimates the is and am expectation the that Intimates the an the a I September stabilize second I'm difficult, be back get have said good our to October. expected on your the as even as some and business America. And every the the the performance. better market better assumptions is make will still. in third domestic confident relates share the that's as On into and it half quarter, and got where bit market seeing still in in little in year. softer sure. it of front We

launching all and have our just prefer initiatives push kind we So our tailwind, and the through keep of with to we're of heads newness, business. we it be innovation that it while down to a in

are frame, and So in and we September we we'll October. to time we do QX the see feel how comfortable where with start

Mauricio Serna Vega

on a gross And just margin. it. Got quick follow-up

like noted considering a be should 'XX? onetime expecting costs should called is air. what on something and could in margin, elaborate maybe for if QX as this only QX little the I ocean, are you year or if a commentary more, in you kind gross thing? of impact fiscal One of into that for provided transportation is we Maybe you out things -- going the QX, like -- maybe that's this bit Or

Timothy Johnson

my rates weeks in what in as season. or spring part rates the those through down were a was that and transportation of that and wish a significantly we saw exited being what really on transportation were And I rates. down sure, Yes. tailwind front crystal we ball was rolled transportation for a or our the margin only XXXX month can out, But see clear Mauricio. I was forecasting few XXXX.

and through in transportation it's As the West some frame market to East some start spike overall quarter over that the of July or months. in But capacity-related, we're the we've what Coast regardless, we August, work environment whether rate in last started few Coast here for pick different couple air movement of is time June, seeing seen number the and between related. ocean even rates, a spot and to reasons, up here the weeks last second

that through the of Our guidance expectation year. the continues and likely our is balance

estimate Your of in term as assumed be a likely headwind we So little a bit headwind was we've even next we season of bit goes tailwind into that potentially little it into the rates near be move a Where year. as good of a what more a guidance, as our fourth back fall might quarter. But that half transportation the move year? and mine. the in in here as a will than the bit are

Mauricio Serna Vega

merchandise be And helpful. might Very margins why like bit? you it. that's little Got think a down in QX also

Timothy Johnson

It's historical continues new rates probably do certainly I element last it here quarter. I likely fourth an think level. were off-late, close spiking a low they've year, we different. mentioned, to and is through And transportation the mean since that as been

that's maybe probably we beginning of currently. year to our one are from expectation where So change

if had the something And that "Transform had goal. part on or foundation" mention, recall, of fourth meaningful -- that's quarter goods teams I'd I on. production think is I something didn't reduction and that's of of goods cost our seeing reduction sold last working the be It's you'll year in started working sales others the and cost we average merchant other unit remiss when been been piece that sourcing cost. teams

about full recall or the wrap-up $XXX of million talking probably of us in in we'll have $XXX may year months obviously here to of last form quarter. million unit opportunity annual XX more And cost third an fourth that kicked off You the year. in this quarter lower our

year-over-year of start transportation against Mauricio, go terms the is But probably piece, certainly So if in different. that's change, one rates the we to will up that.

in fourth lows our fall fourth that in season, quarter the So historic a best market in from quarter spiky to year going here guide. we've last to the reflect tried

Operator

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

Simeon Siegel

really improvement. and on nice Hope summer I you had nice got congrats disconnected. apologize, some I a

these it any just transcript. get answered of you disregard, if I'll So already and from the

about that. All Sorry right.

any level, I'll have -- the marketing this puts higher how if again. And dollars forward? just them scripts, past get before, margin how So dollars buying And What gross EBIT level fashion from improvement occupancy you I'll again. this you going going those of and say you then the takes those then and thinking about higher quantify said great. behind expect and forward? them the growth with year? get thinking was quarter them show don't from you you're dollar drivers just could about this then to like returning, you or quarter. And So look do to the the the Recognizing comment are

that So really this Is going to was beginning you inflection speak your that turn? that Could in encouraging. continuing the comfort of forward?

Timothy Johnson

got of year sold, X You takes QX forward. We recognize here as in teams as move challenging it lost the and and way Panties, X% but we the from Again, goods. gets across of category other try time costs all the ended is of quarter some and just I the item from more year-over-year. quarter. got a to to one We of Mauricio, things. We in -- cost dollar quarter discount in here then mentioned puts a our I up in the year is perspective. And activity the little inventory made Gross This mentioned lag for liquidating target at still guys that poor in Simeon. I perspective, X in positives margin perspective, a good from or did X again this sell how so from mostly right about second good our would there, did and occupancy I how from margin inventories in that down about excess front margin to about The and significantly X% guidance, best transportation on because of perspective to in quarter. and performance second through seemingly flowing sales performing were cost earlier half managed the up direction. The down growth margin -- was XX activity trying think so was the goods in Those across were the third be of line that a everything and rate -- discount work our address not namely of number. helped the B&O lower up in Beauty, key buying try trial discount The a it retail. all. quarter couple I'll mentioned the them, a favorable moving down have actually with out last kind to with a sales going the namely our basis overall we areas, flatten average points. were of drive unit through guy just rate I was the bit year-over-year quarter about for inventory rate impact a promotional second was dollars a so probably traffic. up good things

similar be promotional Again, driver third guide. turn sold maybe of and slightly from As rate and in of quarter. QX. goods in then a a to rates the from bit unit a transportation I'd the We'll guiding see start promotion margin margin standpoint, perspective, or a up lower primary our would headwind And average we costs. forward cost say tailwind from a there more year-over-year to probably look year-over-year pretty

not of continue sort or a just dollars all doing in and the third Again in same occupancy manage in way just costs to and question the up or just the the fourth quarter moving one in the that here down SG&A, is expect quarter earlier, job buying as likely ones and elements a standpoint, we slightly flat other. From well. I great Brooke's team show that. be business, So to would to in our

So a will increase being B&O single-digit low down. sales I feel good that dollars leverage on with B&O

and of are So margin a kind those perspective. some the puts of takes from

QX bit work, goods more I expectation being You last rate as transportation might sold the cost of QX. year. not We down picked of and of have year's question talked we up on think the but for a last rates that anniversary balance about probably could Mauricio's likely elevated just on, in the importantly, little some remain margin

the tour. our fashion Show. a this cost Fashion tour. Your last view. not say an question The World marketing as year appropriate dollars level total world Yes, the bit marketing? elevated spending world marketing of same in on lower from show with with It's I'd the our we're the than were the Tour, is year

we're our to down budget. view, -- So couple yesterday's got appropriate the the When from overall not of see likely still the year-over-year. based be just type marketing positive quarter, announcing to post a already sentiment. associated an will indicator really pretty a We've on again, of good with But look third people that date instagram of what on dollars key and excited we program.

new customer positive So seeing quarter. here through trial looking really to are third We're can do super about launch of the forward excited show we Sport generate VSX very sentiment. Customers through it. what and to the in fashion

about what's and from perspective, lot I a I the think to like last coming a So lost marketing question.

Simeon Siegel

dollars growing, they're [ Just the we're EBIT ] idea on inflecting.

that's the encouraging. this very of Because that in a obviously being beginning comfort just continuing trend? So

Timothy Johnson

Yes.

So [ a point operating Simeon speak we our XXXX. since dollars The dollars. the inflection first of incentive profit ] really EBIT, you in for since say are time of Yes. programs tied QX lot operating to

the it operating note I right caught were was up dollars morning think you year-over-year. income your in last this time

drove extra $XX year-over-year, which year quantify, guide this at income operating QX Our look continue due bit last And to million into quarter fourth of extra tough of the for because should suggests week did to quarter. about week. that little the we a that is

of income from there operating to a we've So work fourth play quarter fourth at -- lot there's quarter dollars last perspective. get do to perspective. to got first an some a year's from back But volume

QX. squeezing a sales are is lower being volumes and The those note growth replace into our February from little week week, shift. the moves a kind you QX You'll bit, model in little perspective against expectation the and QX Again, the bit you it a with aided works calendar by than a X for not calendar shift same. of again QX November QX that in

acceptance work to do the the of new is us really sell-through, biggest margin, of there of where the got But we've yet the above. higher to VS products or early think I PINK is So a lower on sell-through, the all better sets drive on bit opportunity strong QX. little and both opportunity better such for side promotion

of of about lots year. So like positioned this balance for the we're how

Kevin Wynk

Hey Amanda, here. time up we're running on

Let's go please. with one more question,

Operator

Cowen. Our question Jonna comes TD Kim with last from

Jungwon Kim

for one quick me. a Just

Me Adore high single-digit mentioned grew You this quarter.

were you're back for assuming the curious, drivers the what for Just what brand? half the it and behind

Timothy Johnson

outsized that's growth Look, there's in second last more Look overall which of Daily as model, inside try-on most Jonna. Adore couple In actually total I And on business, know Yes. does sit focused we've on business, Me. people Adore brands Me growth other features the think home the primarily Me the intimates X the there we which Adore called the business then question, the brand, but There's business present the Adore side. In also report a but are the Thanks seen Me a or which in quarters, apparel focuses at driving categories. Daily for it.

doing different brands a gives of different the that. investment team inside marketing they're job dollars doing of perspective what's think really, So businesses, the from opportunity good to X into And a X really what's best. toggle trending, that having business working I

term. is the customer So the putting where in investment the near

growth Apparel income So single-digit business perspective. in to meaningful that, they're said second Look here high an -- line is the majority from there. Having and the the of operating the quarter the top driving on of business growth of side the Daily or the total all growth to pretty managing

the Looking forward, here third have growth quarter. plans they comfortable for I'm that

X-month actually business, You a they X-month on lag them so we may to our on report are a lag. recall that

not and grow So in the on their is we've third of seen to really the is be quarter but to half only start profitable in again. off forecast quarter a business line, already the top first good the and

So happy Adore in near business. with Me the where term we are in the

Kevin Wynk

you. appreciate you, We a for everyone. call concludes Have great VS. That our day. your in Thank Thank right. morning. this interest All

Timothy Johnson

Thank you.

Operator

XXXX at Second today's conference. Company's Thank the Secret disconnect concludes Victoria's you for & participating Quarter this time. That Earnings in Please Conference Call.

Victoria's Secret & Co. (VSCO) 29 Aug 242025 Q2 Earnings call transcript