Victoria’s Secret’s shares suffered their worst day ever after the lingerie maker gave a surprise warning that it expects its sales will drop this year as a turnaround bid has failed to take shape.
The company’s shares fell by a record 30% on Thursday — the biggest decline since its IPO in July 2021, according to Bloomberg — after it issued disappointing results for the crucial holiday period and said sales would decline in 2024.
In the quarter ended Feb. 3, comparable store sales fell 6%, the company said. It’s forecasting sales to be about $6 billion this year versus $6.18 billion last year.
Wall Street had expected Victoria’s Secret sales to edge up slightly this year to $6.19 billion.
“As we look into the new year, we recognize the broader intimates market in North America has been down for four consecutive quarters,” chief executive Martin Waters said in a statement. “And we are planning the business appropriately conservative in the near-term.”
The company has struggled to gain momentum after it spun off from L Brands in 2021 and its public image was tarnished in the wake of the #MeToo movement, which vilified Victoria’s Secret as a sexist brand that was out of step.
More inclusive lingerie brands seized on its struggles touting plus sizes and diverse models — which Victoria’s Secret lacked for most of its history.
The retailer was also hurt by its former chief executive and chairman Les Wexner who was too cozy with deceased pedophile Jeffery Epstein.
Nevertheless, Victoria’s Secret said that it’s still the intimates “leader” with about 20% market share “with our digital share up slightly and our stores share down slightly.”
Among the new initiatives the company highlighted is a “try at home” pilot that started in February and is “offering a new buying experience for the Victoria’s Secret and PINK customer,” the company said.
It has also added some new products including a collection designed for women with disabilities last year, bras for women with mastectomies and added plus size models to its lineup.
It also brought back its iconic fashion show with its famous “Angels” last year after a four-year hiatus. Victoria’s Secret canceled the popular catwalk event in 2019, after 24 years.
The event was scrapped amid widespread outrage over the company’s refusal to include plus-sized or transgender models in the show.
“The burden of proof rests on management execution,” said BMO analyst Simeon Siegel in a research note. “And the path is difficult.”
JPMorgan analyst Matthew Boss lowered his rating of the company to ‘underweight’ from ‘neutral and his share price target to $15 from $22.
Shares of the company closed Thursday at $18.01, down 7.61.
This story originally appeared on NYPost
