High Expectations Let Victoria’s Secret Down: Shares Plunged Nearly 20% After the Earnings Report
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Shares of lingerie retailer Victoria's Secret plummeted 19% in premarket trading on September 3, immediately after the release of its quarterly earnings report. Investors were disappointed by the slowdown in growth at the company, which is recovering from a protracted crisis, Bloomberg reports. This year’s rally, which sent Victoria’s Secret’s stock price up 57%, raised market expectations, the agency explains.
The retailer's comparable sales in the second fiscal quarter, which ended on August 1, rose 9%, matching the consensus forecast of analysts surveyed by Bloomberg and even slightly exceeding FactSet's estimate, according to Barron's. However, in the previous reporting period, sales growth was 13%.
Revenue for the past quarter rose 10% to $1.61 billion—while analysts had expected $1.62 billion. Meanwhile, adjusted earnings nearly tripled to $0.95 per share. That is 20% higher than Wall Street had anticipated.
The results allowed the company to raise its forecast for the full fiscal year: revenue is expected to total $7.1–7.18 billion. Previously, the upper limit was $7.13 billion. Victoria’s Secret could post its highest annual sales in seven years, according to Bloomberg.
This news story is being updated.
