Third quarter operating income and diluted EPS above guidance
Provides fourth quarter and reaffirms full year 2022 guidance
Chief Executive Officer
Martin continued, “At our Investor Day in October, we discussed our strategic growth plan which outlines significant runway ahead guided by our three key principles: strengthen our core, ignite growth, and transform the foundation. Led by our two category-defining brands and merchandise leadership positions in intimates and beauty, we remain confident in our ability to deliver our long-term financial targets, reinvest in our business, and return value to our shareholders. Further evidence of our commitment to drive long-term value, we recently announced our agreement to acquire
Third Quarter Results
The Company reported net income of
Third quarter 2022 reported operating income was
The Company reported net sales of
Capital Allocation
On
Fourth Quarter and Full Year 2022 Outlook
The Company is forecasting fourth quarter 2022 net sales to decrease in the high-single digit range compared to last year’s fourth quarter net sales of
The Company is forecasting full year 2022 net sales to decrease 6% to 7% compared to last year’s full year net sales of
As previously announced, we expect the acquisition of Adore Me to close by the end of
At the conclusion of this press release, we have included a reconciliation of reported to adjusted results and forecasted results.
Victoria’s
About Victoria’s
Victoria’s
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
We caution that any forward-looking statements (as such term is defined in the
- the spin-off from Bath & Body Works, Inc. (f/k/a
L Brands, Inc. ) may not be tax-free forU.S. federal income tax purposes; - we may not realize all of the expected benefits of the spin-off;
- general economic conditions, inflation, consumer confidence, consumer spending patterns and market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises or other major events, or the prospect of these events;
- the novel coronavirus (COVID-19) global pandemic has had and may continue to have an adverse effect on our business and results of operations;
- difficulties arising from turnover in company leadership or other key positions;
- our ability to attract, develop and retain qualified associates and manage labor-related costs;
- our dependence on mall traffic and the availability of suitable store locations on appropriate terms;
- our ability to successfully operate and expand internationally and related risks;
- our independent franchise, license, wholesale, and joint venture partners;
- our direct channel business;
- our ability to protect our reputation and the image of our brands;
- our ability to attract customers with marketing, advertising and promotional programs;
- the highly competitive nature of the retail industry and the segments in which we operate;
- consumer acceptance of our products and our ability to manage the life cycle of our brands, keep up with fashion trends, develop new merchandise and launch new product lines successfully;
- our ability to realize the potential benefits and synergies sought with the pending acquisition of
AdoreMe, Inc. ; - our ability to source, distribute and sell goods and materials on a global basis, including risks related to:
- political instability, environmental hazards or natural disasters;
- significant health hazards or pandemics;
- legal and regulatory matters;
- delays or disruptions in shipping and transportation and related pricing impacts; and
- disruption due to labor disputes;
- our geographic concentration of vendor and distribution facilities in central
Ohio andSoutheast Asia ; - the ability of our vendors to deliver products in a timely manner, meet quality standards and comply with applicable laws and regulations;
- fluctuations in freight, product input and energy costs, including those caused by inflation;
- our and our third-party service providers’ ability to implement and maintain information technology systems and to protect associated data and system availability;
- our ability to maintain the security of customer, associate, third-party and company information;
- stock price volatility;
- shareholder activism matters;
- our ability to maintain our credit rating;
- our ability to comply with regulatory requirements; and
- legal, tax, trade and other regulatory matters.
Except as may be required by law, we assume no obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release to reflect circumstances existing after the date of this press release or to reflect the occurrence of future events, even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized. Additional information regarding these and other factors can be found in “Item 1A. Risk Factors” in our Annual Report on Form 10-K filed with the
For further information, please contact:
Victoria’s | |
Investor Relations: | Media Relations: |
investorrelations@victoria.com | communications@victoria.com |
Total Sales (Millions):
Third Quarter 2022 | Third Quarter 2021 | % Inc/ (Dec) | Year-to- Date 2022 | Year-to- Date 2021 | % Inc/ (Dec) | ||||||||||||
Stores – | $ | 812.7 | $ | 920.3 | (11.7 | %) | $ | 2,712.1 | $ | 2,890.0 | (6.2 | %) | |||||
Direct | 341.9 | 406.3 | (15.9 | %) | 1,176.1 | 1,396.0 | (15.8 | %) | |||||||||
International1 | 163.5 | 114.5 | 42.8 | % | 434.9 | 323.2 | 34.6 | % | |||||||||
Total | $ | 1,318.1 | $ | 1,441.1 | (8.5 | %) | $ | 4,323.1 | $ | 4,609.2 | (6.2 | %) |
1 – Results include consolidated joint venture sales in
Comparable Sales Increase (Decrease):
Third Quarter 2022 | Third Quarter 2021 | Year-to- Date 2022 | Year-to- Date 2021 | ||||
Stores and Direct1 | (11%) | 0% | (9%) | 3% | |||
Stores Only2 | (10%) | 7% | (7%) | 8% |
NOTE: Stores are excluded from the comparable sales calculation when they have been closed for four consecutive days or more. Therefore, comparable sales results exclude periods of time that stores were closed for four consecutive days or more as a result of the COVID-19 pandemic. Please refer to our filings with the
1 – Results include company-operated stores in the
2 – Results include company-operated stores in the
Total Stores:
Stores at | Opened | Closed | Reclassed to Joint Venture | Stores at | |||||||
Company-Operated: | |||||||||||
808 | 11 | (7) | - | 812 | |||||||
26 | - | - | - | 26 | |||||||
Subtotal Company-Operated | 834 | 11 | (7) | - | 838 | ||||||
China Joint Venture: | |||||||||||
Beauty & Accessories1 | 35 | 2 | (6) | 8 | 39 | ||||||
Full Assortment | 30 | 2 | (1) | - | 31 | ||||||
Subtotal China Joint Venture | 65 | 4 | (7) | 8 | 70 | ||||||
Partner-Operated: | |||||||||||
Beauty & Accessories | 335 | 10 | (30) | (8) | 307 | ||||||
Full Assortment | 128 | 16 | (8) | - | 136 | ||||||
Subtotal Partner-Operated | 463 | 26 | (38) | (8) | 443 | ||||||
Total | 1,362 | 41 | (52) | - | 1,351 |
1 – Includes nine partner-operated stores.
CONSOLIDATED STATEMENTS OF INCOME | |||||||
THIRTEEN WEEKS ENDED | |||||||
(Unaudited) | |||||||
(In thousands except per share amounts) | |||||||
2022 | 2021 | ||||||
$ | 1,318,077 | $ | 1,441,134 | ||||
Costs of Goods Sold, Buying and Occupancy | (860,705 | ) | (876,067 | ) | |||
Gross Profit | 457,372 | 565,067 | |||||
General, Administrative and Store Operating Expenses | (414,784 | ) | (457,153 | ) | |||
Operating Income | 42,588 | 107,914 | |||||
Interest Expense | (15,329 | ) | (11,917 | ) | |||
Other Income | 2,383 | 632 | |||||
Income Before Income Taxes | 29,642 | 96,629 | |||||
Provision for Income Taxes | 7,425 | 21,416 | |||||
Net Income | 22,217 | 75,213 | |||||
Less: Net Loss Attributable to Noncontrolling Interest | (2,151 | ) | - | ||||
Net Income Attributable to | $ | 24,368 | $ | 75,213 | |||
Net Income Per Diluted Share Attributable to | $ | 0.29 | $ | 0.81 | |||
Weighted Average Shares Outstanding | 82,628 | 92,449 |
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME | ||||||||
THIRTY-NINE WEEKS ENDED | ||||||||
(Unaudited) | ||||||||
(In thousands except per share amounts) | ||||||||
2022 | 2021 | |||||||
$ | 4,323,091 | $ | 4,609,201 | |||||
Costs of Goods Sold, Buying and Occupancy | (2,808,963 | ) | (2,702,408 | ) | ||||
Gross Profit | 1,514,128 | 1,906,793 | ||||||
General, Administrative and Store Operating Expenses | (1,279,906 | ) | (1,370,462 | ) | ||||
Operating Income | 234,222 | 536,331 | ||||||
Interest Expense | (40,710 | ) | (15,659 | ) | ||||
Other Loss | (2,655 | ) | (465 | ) | ||||
Income Before Income Taxes | 190,857 | 520,207 | ||||||
Provision for Income Taxes | 25,285 | 119,878 | ||||||
Net Income | 165,572 | 400,329 | ||||||
Less: Net Loss Attributable to Noncontrolling Interest | (9,545 | ) | - | |||||
Net Income Attributable to | $ | 175,117 | $ | 400,329 | ||||
Net Income Per Diluted Share Attributable to | $ | 2.07 | $ | 4.46 | ||||
Weighted Average Shares Outstanding 1 | 84,659 | 89,685 | ||||||
1 - Reported Weighted Average Shares Outstanding reflects diluted shares in the first, second and third quarters of 2022. For periods prior to the separation in the third quarter of 2021, basic shares at the separation date are being utilized for the calculation of basic and diluted net income per share. |
NON-GAAP FINANCIAL INFORMATION | |||||||||||||||
(Unaudited) | |||||||||||||||
(In thousands except per share amounts) | |||||||||||||||
The non-GAAP financial information presented in this press release should not be construed as an alternative to the reported results determined in accordance with generally accepted accounting principles. Further, the Company’s definition of such non-GAAP financial measures may differ from similarly titled measures used by other companies. Management believes that the presentation of adjusted financial information provides additional information to investors to facilitate the comparison of past and present operations. While it is not possible to predict future results, management believes the adjusted financial information is useful for the assessment of the ongoing operations of the Company because the adjusted items are not indicative of our ongoing operations due to their size and nature. Management uses adjusted financial information as key performance measures of results of operations for the purpose of evaluating performance internally. The non-GAAP financial information should be read in conjunction with the Company’s historical financial statements and notes thereto contained in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q filed with the | |||||||||||||||
Third Quarter | Year-to-Date | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Reconciliation of Reported to Adjusted Operating Income | |||||||||||||||
Reported Operating Income - GAAP | $ | 42,588 | $ | 107,914 | $ | 234,222 | $ | 536,331 | |||||||
Occupancy-related Legal Matter (a) | - | - | 21,679 | - | |||||||||||
Restructuring Charge (b) | - | - | 29,348 | - | |||||||||||
Adjusted Operating Income | $ | 42,588 | $ | 107,914 | $ | 285,249 | $ | 536,331 | |||||||
Reconciliation of Reported to Adjusted Net Income Attributable to | |||||||||||||||
Reported Net Income Attributable to | $ | 24,368 | $ | 75,213 | $ | 175,117 | $ | 400,329 | |||||||
Occupancy-related Legal Matter (a) | - | - | 21,679 | - | |||||||||||
Restructuring Charge (b) | - | - | 29,348 | - | |||||||||||
Tax Effect of Adjusted Items | - | - | (12,755 | ) | - | ||||||||||
Adjusted Net Income Attributable to | $ | 24,368 | $ | 75,213 | $ | 213,389 | $ | 400,329 | |||||||
Reconciliation of Reported to Adjusted Net Income Per Diluted Share Attributable to | |||||||||||||||
Reported Net Income Per Diluted Share Attributable to | $ | 0.29 | $ | 0.81 | $ | 2.07 | $ | 4.46 | |||||||
Occupancy-related Legal Matter (a) | - | - | 0.19 | - | |||||||||||
Restructuring Charge (b) | - | - | 0.26 | - | |||||||||||
Adjusted Net Income Per Diluted Share Attributable to | $ | 0.29 | $ | 0.81 | $ | 2.52 | $ | 4.46 | |||||||
(a) In the first quarter of 2022, we recognized a | |||||||||||||||
(b) In the second quarter of 2022, we recognized a |
NON-GAAP FINANCIAL INFORMATION | |||||
FORECASTED FULL YEAR ENDING | |||||
(Unaudited, in millions) | |||||
Forecasted | |||||
Full Year Ending | |||||
Reconciliation of GAAP to Adjusted Operating Income | |||||
Operating Income - GAAP | $ | 474 to 524 | |||
Occupancy-related Legal Matter (a) | 22 | ||||
Restructuring Charge (b) | 29 | ||||
Adjusted Operating Income | $ | 525 to 575 | |||
Reconciliation of GAAP to Adjusted Net Income Attributable to | |||||
Net Income Attributable to | $ | 341 to 379 | |||
Occupancy-related Legal Matter (a) | 22 | ||||
Restructuring Charge (b) | 29 | ||||
Tax Effect of Adjusted Items | (13 | ) | |||
Adjusted Net Income Attributable to | $ | 379 to 417 | |||
Reconciliation of GAAP to Adjusted Net Income Per Diluted Share Attributable to | |||||
Net Income Per Diluted Share Attributable to | $ | 4.05 to 4.50 | |||
Occupancy-related Legal Matter (a) | 0.19 | ||||
Restructuring Charge (b) | 0.26 | ||||
Adjusted Net Income Per Diluted Share Attributable to | $ | 4.50 to 4.95 | |||
(a) In the first quarter of 2022, we recognized a | |||||
(b) In the second quarter of 2022, we recognized a |
Source:
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