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Earnings Results: Victoria’s Secret says inflation will remain a problem for retailers in 2022

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Victoria’s Secret & Co. late Wednesday reported quarterly profit and sales above Wall Street expectations but called for a dimmer first quarter, saying it expects inflation to be a concern throughout the year for retailers.

Victoria’s Secret
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said it earned $246.1 million, or $2.70 a share, in the fourth quarter, compared with earnings of $282.4 million, or $3.20 a share, in the year-ago quarter.

Revenue rose 4% to $2.2 billion, the company said.

FactSet consensus called for earnings of $2.63 a share on sales of $2.1 billion. The stock rose immediately after the report, but turned lower shortly after, down less than 1% at last check.

“2021 was a milestone year for our company, our first as a public company,” Chief Executive Martin Waters said in a statement. “We are keenly aware 2022 will present continued challenges for retailers in this inflationary environment.”

Victoria’s Secret guided for first-quarter sales in a range between $1.425 billion and $1.495 billion, which would compare with first-quarter 2021 sales of $1.554 billion. The consensus on FactSet calls for first-quarter sales of $1.5 billion.

The company forecast operating income between $80 million and $110 million, compared with $225.7 million in 2021, mostly thanks to additional supply-chain cost pressures and without the boost from last year’s federal stimulus benefits.

EPS for the quarter was seen between 70 cents and 95 cents, contrasting with EPS of $1.97 in the first quarter of 2021. Analysts expect first-quarter adjusted EPS of $1.32.

The company guided for full-year 2022 sales flat or up low single digits, compared with 2021 sales of $6.8 billion.

Shares of Victoria’s Secret ended the regular trading Wednesday up 6.7%.

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