Victoria’s Secret Stock is Out of the Box


Specialty underwear store for women Victoria’s Secret (NYSE: VSCO) Shares have skyrocketed (-44%) in the bear market this year. The company split from Limited Brands in 2021 with 1,400 retail locations under the Victoria’s Secret and PINK brands. The company easily exceeded its EPS estimates for fiscal year 2021 by managing headwinds, including inflationary pressures, supply chain disruptions, weather and market volatility, and rising logistics costs. However, revenues fell (-4.5%) mainly due to the reversal of spending on stimulus controls. Inventory levels ended the quarter with a 37% increase due to longer transit times and strategic assortment decisions to drive future growth. Only 10% was transfer inventory. The company has improved its distribution with the launch of VS & Co. Lab and expects it to be a second half growth story with new product launches, especially in the bra and beauty lines. Prudent investors who have been waiting to expose themselves to this iconic underwear retailer may be wary of the opportunistic setbacks of Victoria’s Secret shares.



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Publication of results for the first quarter of the financial year 2022

On May 31, 2022, Victoria’s Secret released its fiscal results for the first fiscal quarter of 2022 for the quarter ending April 2022. The company reported earnings per share (EPS) of $ 1.11 excluding non-recurring items versus consensus analyst estimates for a profit of $ 0.84, $ 0.27 per share. Revenue fell (-4.5%) year-on-year (year-on-year) to $ 1.48 billion, beating consensus analysts’ 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 the business and delivered more than $ 1 billion in EBITDA over the final twelve-month period. Looking to the future , I believe we have a focused, resilient and expert strategy, talent and customer connection that we need to maintain and grow our dominant position as a market leader in the intimate goods category. macro through merchandise and marketing that delights our customers, new business initiatives designed to expand. our customer base and grow sales, and disciplined financial management. “

Online guidance

Victoria’s Secret issued an online guide for the second fiscal quarter of 2022 for a BPA of $ 0.95 to $ 1.17 compared to consensus analyst estimates of $ 1.17. Revenue is expected to go from a low digit to a low digit. Analyst consensus estimates for revenue are for a year-on-year decline (-1%).

Takeaway calls

CEO Waters said the company generated more than $ 1 billion in EBITDA over the 12-month period. The drop in sales (-4.5%) was adjusted by a stimulus of $ 75 million to flat sales last year. There was a boost in the bra and beauty business as the international recovered from previous VOCID-related restrictions. Adjusted operating income was above the projected range of $ 80 million to $ 110 million, with $ 116 million. He expects the rest of the year to continue to be challenged by the volatility attributed to macroeconomic conditions. The company expects operating income for the second fiscal quarter of 2022 to range from $ 125 million to $ 155 million. For the entire year 2022, the company expects sales to be flat to one-digit lows. CEO Waters sees a number of opportunities in the latter part of the year, such as new bras for PINK and Victoria’s Secret. In Beauty, the company expanded its distribution with the launch of VS & Co. Lab as a loyalty program. He believes the business has stabilized now. He believes that the company can keep operating income at low double-digit sales percentages to achieve its goal if the middle-aged operating income rate.

Victoria's Secret stock is out of the box

Opportunistic VSCO withdrawal price levels

The use of rifle charts in weekly and daily time periods provides an accurate view of the landscape for VSCO actions. Weekly Rifle Chart Reversed Puppy Breakdown After Rejecting $ 46.78 Fibonacci level (fib).. The downward trend in the weekly rifle chart has a 5-period moving average (MA) down to $ 38.86, followed by the 15-period MA at $ 45.62 and the weekly Bollinger Bands (BBs) lowest at $ 29.55. The weekly weekly stochastic reverse puppy leaned to the side of 10. The weekly Low Market Structure (MSL) buys activators at a break above $ 52.77. The daily rifle chart also has a reverse breakdown of the puppy with a 5-period MA drop to $ 33.62, followed by the 15-period MA to $ 38.96 and lower daily BBs to $ 29.04. The daily stochastic is stopped near the 5 bands. The 50-period daily MA is $ 44.88 and the 200-period daily MA is $ 51.97. Opportunistic withdrawal levels are at $ 29.29, $ 27.61, $ 25.50, $ 23.78, $ 22.75, $ 20.54, and $ 19.53. Upward trajectories range from $ 39.99 fib to the level of $ 49.38 fib.



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