Thu, Jun 12, 8:22 PM (31 days ago)
**Victoria's Secret & Co. (VSCO) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $1.353 billion, flat compared to Q1 2024. - **Profit Margins:** Gross profit decreased by $27 million to $474 million, with a gross profit rate of 35.1% (down from 36.9%). - **Operating Income:** Decreased by $6 million to $20 million, with an operating income rate of 1.5% (down from 1.9%). - **Net Income:** Reported a net loss of $2 million, compared to a net loss of $4 million in Q1 2024. - **Cash Flow:** Net cash used for operating activities was $150 million, an increase of $34 million compared to Q1 2024, primarily due to higher inventory levels and related payment timing. **Key Metrics and Trends:** - **Sales Performance:** North America store sales decreased by 1%, direct channel sales decreased by 3%, while international sales increased by 9%. - **Store Data:** Total selling square feet decreased by 3%, with a 2% increase in sales per average selling square foot. - **Debt and Liquidity:** Total long-term debt was $1.078 billion. The company amended its ABL Facility to extend maturity and reduce interest rates. - **Share Repurchases:** No shares were repurchased under the March 2024 Share Repurchase Program. **Uncertainties and Future Operations:** - **Macro Environment:** Faces near-term headwinds and ongoing uncertainty due to tariffs and potential retaliatory measures. - **Security Incident:** Detected a security incident involving information technology systems, with ongoing investigation and potential financial impacts. - **Strategic Priorities:** Focus on recommitting to PINK, supercharging bras, fueling growth in lifestyle categories, and evolving brand projection. **Financial Condition and Liquidity:** - **Cash and Cash Equivalents:** Ended the quarter at $138 million, down from $227 million at the beginning of the period. - **Capital Expenditures:** Estimated at $220 million for fiscal year 2025, focused on store capital programs and strategic initiatives. - **Debt Facilities:** Amended ABL Facility to extend maturity and reduce interest rates, with remaining availability of $509 million. **Conclusion:** Victoria's Secret & Co. faced challenges in Q1 2025 with flat revenue and decreased profit margins, primarily due to increased transportation costs and tariff-related adjustments. The company is managing liquidity and debt effectively, with strategic initiatives aimed at driving long-term growth. However, uncertainties in the macro environment and a recent security incident pose risks to future operations.