Victoria’s Secret shares suffered their worst drop in history after the lingerie maker issued an unexpected warning that a turnaround bid did not materialize and that it expected sales to decline this year.
The company’s stock price fell a record 30% on Thursday. According to Bloomberg, it was the biggest decline since the IPO in July 2021. The move comes after the company reported disappointing financial results during the crucial holiday shopping season and announced that sales will decline in 2024.
Same-store sales fell 6% in the quarter that ended Feb. 3, the company said. It expects sales to be about $6 billion this year, compared to $6.18 billion last year.
Wall Street had expected Victoria’s Secret sales to rise slightly this year to $6.19 billion.
“As we enter the new year, we recognize that the broader North American underwear market has been weak for four consecutive quarters,” CEO Martin Waters said in a statement. “And we have an appropriately conservative business plan in the short term.”
The company has struggled to gain traction since being spun off from L Brands in 2021, and its public image suffered in the wake of the #MeToo movement, which vilified Victoria’s Secret as an outdated and sexist brand.
More inclusive lingerie brands weathered their struggles by promoting plus sizes and diverse models for most of Victoria’s Secret’s history.
The company was also hurt by its former CEO and chairman, Les Wexner, who was too friendly with the deceased pedophile Jeffrey Epstein.
Nevertheless, Victoria’s Secret said it is still the “leader” in underwear with about 20% market share, although “digital share has increased slightly and in-store share has decreased slightly.” Ta.
Among the new initiatives highlighted by the company is a “try it at home” pilot launched in February, which it says is “providing a new purchasing experience for Victoria’s Secret and PINK customers.” the company said.
It also added new products last year, including a collection designed for women with disabilities and bras for women who have had mastectomies, and added plus-size models to its lineup.
Also Bringing back the iconic fashion show Last year at the famous “Angels” After a four-year hiatus. In 2019, Victoria’s Secret canceled its popular catwalk event for the first time in 24 years.
The event was canceled amid outrage over the company’s refusal to allow plus-size and transgender models to appear in its shows.
“The burden of proof rests on management’s execution,” BMO analyst Simeon Siegel said in a research note. “And the road is difficult.”
Morgan Stanley analyst Matthew Vos lowered the company’s rating from “neutral” to “underweight” and lowered his price target from $22 to $15.
The company’s stock was trading at $17.70 late Thursday morning.
