Victoria’s Secret reports drop in Q3 profit

Victoria’s Secret has reported a drop in profit in the third quarter of the year, but still beat expectations.

The intimates specialty retailer made a net income of 24 million dollars in the three months to October 29, down from 75 million dollars a year earlier. Its profit was above the high-end of its previously communicated guidance.

It came as net sales fell 9 percent to 1.3 billion dollars, which was in line with its guidance, as shoppers reined in their spending amid high inflation. On a comparable basis, sales were down 11 percent.

‘Significant progress’ in business transformation

Victoria's Secret chief executive Martin Waters told investors: “We have created a solid financial platform with our new, more agile operating structure, and even in a very challenging macroeconomic environment, we were able to deliver third quarter operating income and earnings per diluted share results above our previous guidance.”

He added that the company continues to make “significant progress” in its transformation in the past year and a half after separating from L Brands and becoming a standalone company.

Looking ahead, Victoria's Secret expects full-year net sales to decrease by between 6 percent to 7 percent from the prior year.

It expects adjusted operating income to be in the range of 525 million dollars and 575 million dollars, while adjusted net income is estimated to be in the range of 4.50 dollars to 4.95 dollars per diluted share.

The update comes after Victoria's Secret announced in July it had cut around 160 management roles, or approximately 5 percent of its head office headcount, as part of a reorganisation of the business.