What Happened?
Shares of intimatewear and beauty retailer Victoria’s Secret (NYSE:VSCO) fell 6.5% in the pre-market session after the company appointed a new CFO, Scott Sekella, who most recently served as CFO of fabric and crafts retailer Joann and previously held financial leadership roles at Under Armour and Crocs. In conjunction with this appointment, the company raised the midpoint of Q4 guidance for sales, operating income, and adjusted EPS. The market seemed to be looking for a more convincing raise, as the holiday season seemed to be a strong one for Victoria's Secret and other specialty retailers. This can be seen by the recent strong stock price performance, which seemed to bake in the good news prior to this announcement.
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What The Market Is Telling Us
Victoria's Secret’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock dropped 32.1% on the news that the company reported fourth-quarter results with same-store sales and revenue falling below analysts' expectations. In addition, its full-year revenue and operating income guidance missed analysts' expectations, with the latter quite a large amount below expectations. On the other hand, gross margin outperformed and led to a narrow EPS beat vs Wall Street's estimates. Overall, this was a pretty poor quarter for Victoria's Secret with the guidance surely dragging shares down.
Victoria's Secret is down 11% since the beginning of the year, and at $35.96 per share, it is trading 26.2% below its 52-week high of $48.71 from December 2024. Investors who bought $1,000 worth of Victoria's Secret’s shares at the IPO in July 2021 would now be looking at an investment worth $846.12.
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