Victoria's Secret & Co. (VSCO) Bundle
A Brief History of Victoria's Secret & Co.
Victoria's Secret & Co., a renowned name in the lingerie and beauty industry, has undergone significant transformations since its inception. The brand was founded in 1977 by Roy Raymond in San Francisco, originally aimed at creating a comfortable shopping environment for men purchasing lingerie for their partners. The brand gained substantial recognition after being acquired by Leslie Wexner and L Brands in 1982, which propelled it into a leading position in the market.
By the 1990s, Victoria's Secret had become synonymous with high-profile fashion shows and celebrity endorsements, establishing itself as a cultural icon. However, the brand faced challenges in the late 2010s, including declining sales and changing consumer preferences. In 2020, L Brands announced its intention to spin off Victoria's Secret into a standalone public company, which was realized in August 2021.
Financial Performance Overview as of 2024
As of the second quarter ending August 3, 2024, Victoria's Secret reported net sales of $1.417 billion, a slight decrease from $1.427 billion in the same period of 2023. Year-to-date sales for 2024 totaled $2.777 billion, compared to $2.834 billion in 2023.
| Period | Net Sales (in millions) | Cost of Goods Sold (COGS) (in millions) | Gross Profit (in millions) | Operating Income (in millions) | Net Income (in millions) |
|---|---|---|---|---|---|
| Q2 2024 | $1,417 | $916 | $501 | $62 | $32 |
| Q2 2023 | $1,427 | $940 | $487 | $26 | ($1) |
| Year-to-Date 2024 | $2,777 | $1,774 | $1,003 | $89 | $30 |
| Year-to-Date 2023 | $2,834 | $1,845 | $989 | $54 | $3 |
Debt and Financial Obligations
As of August 3, 2024, Victoria's Secret reported total long-term debt of $1.119 billion, down from $1.270 billion a year prior. The company maintains various credit facilities, including a $389 million term loan due in August 2028 and a $145 million asset-based revolving credit facility due in August 2026.
| Debt Type | Amount (in millions) | Maturity Date |
|---|---|---|
| Term Loan Facility | $389 | August 2028 |
| Asset-Based Revolving Credit Facility | $145 | August 2026 |
| Senior Secured Debt | $528 | — |
| Senior Unsecured Debt | $595 | July 2029 |
Market Position and Strategic Initiatives
In 2024, Victoria's Secret continues to focus on its strategic priorities: accelerating core business operations, igniting growth, and transforming its foundational aspects. The company has reported a decrease in marketing expenses, contributing to a reduction in general, administrative, and store operating expenses, which totaled $914 million year-to-date 2024, down from $935 million in 2023.
Victoria's Secret has also been actively managing its inventory, with total inventories reported at $1.019 billion as of August 3, 2024. This reflects a strategic approach to align stock levels with consumer demand and market trends.
| Inventory Type | Amount (in millions) |
|---|---|
| Finished Goods Merchandise | $954 |
| Raw Materials and Merchandise Components | $65 |
| Total Inventories | $1,019 |
As of August 3, 2024, the company's cash and cash equivalents totaled $169 million, reflecting its liquidity position as it navigates through market dynamics.
Overall, Victoria's Secret & Co. is positioned to leverage its brand equity and operational efficiencies as it continues to adapt to the evolving retail landscape.
A Who Owns Victoria's Secret & Co. (VSCO)
Ownership Structure
As of 2024, Victoria's Secret & Co. (VSCO) has a diverse ownership structure comprising institutional investors, retail investors, and company insiders. The largest shareholders include investment management firms and mutual funds.
| Shareholder Type | Percentage Owned | Notable Shareholders |
|---|---|---|
| Institutional Investors | 80% | Vanguard Group, BlackRock, State Street Corporation |
| Insider Ownership | 5% | Leslie Wexner (founder), Andrew Meslow (CEO) |
| Retail Investors | 15% | Public shareholders |
Institutional Ownership
Institutional investors hold approximately 80% of Victoria's Secret's shares, reflecting strong confidence in the company's strategy and performance. The top three institutional shareholders are:
- Vanguard Group: 11.5%
- BlackRock: 10.8%
- State Street Corporation: 7.3%
Insider Ownership
Insider ownership accounts for around 5% of total shares, indicating that management has a vested interest in the company's performance. Key insiders include:
- Leslie Wexner: Founder, former CEO, and largest individual shareholder.
- Andrew Meslow: Current CEO, with a significant number of shares acquired through compensation packages.
Recent Financial Performance
For the second quarter of 2024, Victoria's Secret reported:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $1.417 billion | $1.427 billion |
| Gross Profit | $501 million | $487 million |
| Operating Income | $62 million | $26 million |
| Net Income | $32 million | ($1 million) |
Market Capitalization
As of August 2024, Victoria's Secret has a market capitalization of approximately $3.5 billion, reflecting investor confidence and market performance.
Stock Performance
Over the past year, VSCO stock has shown fluctuations, with a current price of approximately $45 per share. The stock has seen a 20% increase in value year-to-date, indicating recovery and growth following previous challenges.
Debt and Financial Health
Victoria's Secret carries a long-term debt of approximately $1.119 billion as of August 2024. The company has made considerable efforts to reduce interest expenses, which were reported at $21 million for the second quarter of 2024, down from $24 million in the same period last year.
Future Outlook
Victoria's Secret aims to improve its market share through strategic initiatives, including enhancing digital sales channels and expanding international operations. The company is expected to continue focusing on its core brands while exploring new market opportunities.
Victoria's Secret & Co. (VSCO) Mission Statement
Victoria's Secret & Co. (VSCO) is committed to delivering innovative and high-quality products that inspire and empower women. The company aims to be the world’s leading retailer of lingerie and beauty products, creating an emotional connection with its customers through exceptional product offerings and a unique shopping experience.
Financial Overview
As of the second quarter of 2024, Victoria's Secret reported the following financial metrics:
| Metric | Q2 2024 | Q2 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Total Net Sales (in millions) | $1,417 | $1,427 | $2,777 | $2,834 |
| Gross Profit (in millions) | $501 | $487 | $1,003 | $989 |
| Operating Income (in millions) | $62 | $26 | $89 | $54 |
| Net Income (in millions) | $32 | $(1) | $30 | $3 |
| Comparable Store Sales (%) | (5%) | (14%) | (6%) | (11%) |
Market Position and Strategy
Victoria's Secret has strategically focused on three key priorities:
- Accelerate Our Core: Enhancing the primary product lines to improve sales and customer engagement.
- Ignite Growth: Expanding international markets and leveraging digital channels to drive sales.
- Transform the Foundation: Investing in technology and infrastructure to streamline operations.
Store Operations
As of August 3, 2024, the company operated:
| Category | Count |
|---|---|
| Company-Operated Stores in the U.S. | 793 |
| International Stores | Approximately 200 |
The average sales per store for Q2 2024 were $944, reflecting a slight decrease from $947 in Q2 2023.
Financial Health
Victoria's Secret's balance sheet as of August 3, 2024, shows:
| Asset Category | Value (in millions) |
|---|---|
| Total Assets | $4,635 |
| Total Liabilities | $4,141 |
| Total Equity | $494 |
The company’s liquidity position remains strong, with cash and cash equivalents totaling $169 million.
Future Outlook
Victoria's Secret is focused on leveraging its brand strength while navigating the evolving retail landscape. The company aims to enhance its product offerings and improve customer experience, which is expected to drive future revenue growth.
How Victoria's Secret & Co. (VSCO) Works
Business Model
Victoria's Secret & Co. operates through three primary channels: Stores, Direct, and International.
- Stores: North America net sales were $800 million in Q2 2024, a decrease of 2% from $817 million in Q2 2023.
- Direct: Sales decreased to $430 million, from $434 million, a decline of 1% year-over-year.
- International: Sales increased to $187 million, up 6% from $176 million in Q2 2023.
| Channel | Q2 2024 (in millions) | Q2 2023 (in millions) | % Change |
|---|---|---|---|
| Stores - North America | $800 | $817 | (2%) |
| Direct | $430 | $434 | (1%) |
| International | $187 | $176 | 6% |
| Total Net Sales | $1,417 | $1,427 | (1%) |
Financial Performance
In the second quarter of 2024, the total net sales decreased by $10 million to $1.417 billion compared to $1.427 billion in the second quarter of 2023. The gross profit for the same quarter was $501 million, representing a gross profit rate of 35.4%, up from 34.1% the previous year.
| Financial Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Sales | $1,417 million | $1,427 million | (1%) |
| Gross Profit | $501 million | $487 million | 3% |
| Gross Profit Rate | 35.4% | 34.1% | 1.3% |
Expenses and Income
General, administrative, and store operating expenses for Q2 2024 were $439 million, a decrease of 5% from $461 million in Q2 2023. The operating income increased to $62 million, compared to $26 million in the previous year, with an operating income rate of 4.4% versus 1.8% in Q2 2023.
| Expense/Income Type | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| General & Administrative Expenses | $439 million | $461 million | (5%) |
| Operating Income | $62 million | $26 million | 138% |
| Operating Income Rate | 4.4% | 1.8% | 2.6% |
Cash Flow and Capital Expenditures
Year-to-date 2024, net cash used for operating activities was $(1) million, compared to $(19) million in year-to-date 2023. Capital expenditures for year-to-date 2024 were $99 million, down from $144 million in the previous year.
| Cash Flow Activity | Year-to-Date 2024 (in millions) | Year-to-Date 2023 (in millions) |
|---|---|---|
| Net Cash Used for Operating Activities | $(1) | $(19) |
| Capital Expenditures | $99 | $144 |
Debt and Liquidity
As of August 3, 2024, the long-term debt stood at $1.119 billion, with total liabilities amounting to $4.141 billion. The total assets were reported at $4.635 billion.
| Debt and Liquidity Metrics | As of August 3, 2024 (in millions) | As of February 3, 2024 (in millions) |
|---|---|---|
| Long-term Debt | $1,119 | $1,120 |
| Total Liabilities | $4,141 | $4,162 |
| Total Assets | $4,635 | $4,600 |
Tax and Earnings
The effective tax rate for year-to-date 2024 was 35.9%, compared to 62.0% in year-to-date 2023. The net income for the second quarter of 2024 was $32 million, up from a loss of $1 million in the second quarter of 2023.
| Tax and Earnings Metrics | Q2 2024 | Q2 2023 |
|---|---|---|
| Effective Tax Rate | 35.9% | 62.0% |
| Net Income | $32 million | $(1 million) |
How Victoria's Secret & Co. (VSCO) Makes Money
Revenue Streams
Victoria's Secret & Co. generates revenue through multiple channels:
- Company-operated stores in North America
- Direct sales via e-commerce platforms
- International sales through franchising and wholesale arrangements
- Credit card programs
Financial Performance Overview
As of the second quarter of 2024, Victoria's Secret reported net sales of $1.417 billion, a decrease of 1% compared to $1.427 billion in the second quarter of 2023.
| Channel | Q2 2024 Sales (in millions) | Q2 2023 Sales (in millions) | % Change |
|---|---|---|---|
| North America Stores | $800 | $817 | (2%) |
| Direct | $430 | $434 | (1%) |
| International | $187 | $176 | 6% |
| Total Net Sales | $1,417 | $1,427 | (1%) |
Net Income and Expenses
In the second quarter of 2024, Victoria's Secret achieved a net income of $32 million, compared to a net loss of $1 million in the second quarter of 2023.
| Financial Metric | Q2 2024 (in millions) | Q2 2023 (in millions) |
|---|---|---|
| Net Income | $32 | $(1) |
| Operating Income | $62 | $26 |
| Gross Profit | $501 | $487 |
| General, Admin, and Store Operating Expenses | $439 | $461 |
Cost Management
In the second quarter of 2024, the gross profit margin improved to 35.4%, up from 34.1% in the same quarter of the previous year. This improvement was primarily due to cost reductions in goods sold.
International Sales Growth
The international sales channel showed a positive trend with a 6% increase in sales, reaching $187 million in Q2 2024.
Credit Card Programs
Victoria's Secret has a co-branded credit card program, which generated $17 million in net sales in Q2 2024, compared to $23 million in Q2 2023.
| Credit Card Revenue | Q2 2024 (in millions) | Q2 2023 (in millions) |
|---|---|---|
| Net Sales from Credit Card Programs | $17 | $23 |
Year-to-Date Performance
For the year-to-date period ending August 3, 2024, net sales totaled $2.777 billion, reflecting a decrease of 2% from $2.834 billion in the same period of 2023.
| Year-to-Date Metric | 2024 (in millions) | 2023 (in millions) | % Change |
|---|---|---|---|
| Total Net Sales | $2,777 | $2,834 | (2%) |
| North America Stores | $1,529 | $1,603 | (5%) |
| Direct | $879 | $898 | (2%) |
| International | $369 | $333 | 11% |
Operational Efficiency
Victoria's Secret has been focusing on improving operational efficiency, leading to a decrease in general, administrative, and store operating expenses by $21 million year-to-date.
Debt and Interest Expense
As of Q2 2024, the interest expense for the company was $21 million, a decrease from $24 million in Q2 2023.
| Interest Expense | Q2 2024 (in millions) | Q2 2023 (in millions) |
|---|---|---|
| Interest Expense | $21 | $24 |
Tax Provisions
The effective tax rate for the second quarter of 2024 was 22.4%, significantly lower than the 144.2% recorded in Q2 2023.
Deferred Revenue
As of August 3, 2024, deferred revenue stood at $284 million, reflecting gift cards and loyalty programs.
| Deferred Revenue | August 3, 2024 (in millions) | February 3, 2024 (in millions) | July 29, 2023 (in millions) |
|---|---|---|---|
| Deferred Revenue | $284 | $310 | $280 |
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