Exclusive Women’s Intimate Apparel Retailer Victoria’s Secret (NYSE:VSCO) The stock has lost (-44%) this year bear market, The company was spun off from Limited Brands in 2021 with 1,400 retail locations under the Victoria’s Secret and Pink brands. The company easily beat its FY21 EPS estimates including management headwinds inflation Pressure, the supply chain Disruptions, Weather and Markets instabilityand growing Logistics cost. However, repatriation from stimulus check spending resulted in a decline in revenue (-4.5%). Inventory levels ended up 37% due to longer transit times and strategic classification decisions to drive future growth. Only 10% of this was carryover inventory. The company has improved its distribution with the launch of VS & Co. lab and hope to be a second half growth story especially with the new product rollout in bras and beauty lines. Prudent investors who are willing to risk exposure in this coveted intimate wear retail seller Opportunists can see loopholes in Victoria’s Secret stocks.
Q1 Fiscal 2022 Earnings Release
On May 31, 2022, Victoria’s Secret released its fiscal first quarter fiscal 2022 results for the quarter ended April 2022. The company reported earnings-per-share (EPS) of $1.11 excluding non-recurring items versus consensus analyst estimates. $0.84, a $0.27 beat per share. Revenue fell (-4.5%) year-over-year (YoY) to $1.48 billion, beating Consensus analyst estimates by $1.47 billion. The company returned $110 million to shareholders through its capital allocation program. Victoria’s Secret CEO Martin Waters said, “As a result of our deliberate actions, we have stabilized business and delivered over $1 billion in EBITDA for a twelve-month period. Looking ahead, I believe We have focused strategy, flexible and expertly focused. As the market leader in the intimate merchandise category we need talent, and customer connections to maintain and grow our dominant position. We delight our customers. We are well prepared to meet macro challenges through merchandise and marketing, new business initiatives designed to expand our customer base and increase sales, and disciplined financial management.”
Victoria’s Secret issued in-line guidance for EPS for the second quarter of fiscal 2022 between $0.95 and $1.17 versus consensus analyst estimates of $1.17. Revenue is expected to go down from low single digits to low single digits. The consensus analyst estimate for revenue is a (-1%) year-over-year decline.
Conference Call Takeaways
CEO Waters said the company generated more than $1 billion in EBITDA for the previous 12-month period. The (-4.5%) sales decline was adjusted for a $75 million incentive for flat sales last year. Momentum was seen in the bra and beauty business as internationally recovered from prior COVID-related restrictions. Adjusted operating income came in at $116 million, above the previously expected range of $80 million to $110 million. He expects the rest of the year to remain challenging with volatility due to macroeconomic conditions. The company expects operating income in the second quarter of fiscal year 2022 to be between $125 million and $155 million. For the full year 2022, the company expects sales to be flat to low single digits. CEO Waters sees several opportunities in the latter half of the year, including new bras for both the Pink and Victoria’s Secret brands. In beauty, the company expanded distribution with the launch of VS&Co. Lab as its loyalty program. They feel that business has stabilized now. He thinks the company can maintain operating income in the low double-digit percentage of sales if mid-teens operating income rate toward achieving its target.
VSCO Opportunistic Pullback Price Level
using the rifle chart Provides an accurate view of the scenario for VSCO stocks on weekly and daily time frames. The Weekly Rifle Chart posted a $46.78 . Rejected After Started a Reversible Puppy Breakdown Fibonacci (Fib) Levels, The weekly Rifle chart is in a downtrend with a fall to the 5-period moving average (MA) at $38.86, followed by the 15-period MA at $45.62 and the lower weekly Bollinger Band (BB) at $29.55. Weekly Stochastic Mini Inverted Pup Leaned Through 10-Bands. weekly Market Structure Less (MSL) Buy trigger on breakout above $52.77. There is also an inverse puppy breakdown on the daily rift chart, with the 5-period MA at $33.62 followed by the 15-period MA at $38.96 and the lower daily BB at $29.04. The Daily Stochastic is stalled near the 5-bands. The daily 50-period MA sits at $44.88 and the daily 200-period MA at $51.97. Opportunistic pullback levels sit at $29.29 Fib, $27.61, $25.50, $23.78 Fib, $22.75 Fib, $20.54, and $19.53 levels. The upward trajectory ranges from the $39.99 fib to the $49.38 fib level.