Victoria’s Secret (NYSE: VSCO), the iconic lingerie brand, has experienced a substantial decline in shares and sales throughout 2023.
Much of this damage can be attributed to the company’s recent strategic shift, which sought to prioritize woke and feminist-oriented initiatives. The company even made most of its board directors female as part of this strategy.
However, judging from its 2023 stock market performance and dwindling sales, it appears that the new approach did not yield the desired results. The company’s shares are down 45% year-to-date.
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The San Francisco, California-based lingerie and beauty retailer is well aware of this, which is why it said on October 17 that it plans to ditch wokeness and return to its core business principles, in a bid to rejuvenate its timeless appeal.
Victoria’s plunging sales
In an interview with The Business of Fashion, Victoria’s Secret said its recent initiatives to promote inclusivity and get rid of some of its most popular supermodels attracted “favorable reviews from online critics [but] never translated into sales.”
And the numbers confirm that. The company’s projected revenue for 2023 sits at $6.2 billion, down 5% from the last year and even 2020 when the brand reported $7.5 billion in revenue.
For that reason, Victoria’s Secret decided to go back to the basics. According to The Business of Fashion, its goal is to “improve profitability and cross back over $7 billion in annual sales.”
To achieve this, the retailer intends to launch new activewear and swimwear collections, revamp its existing stores, and open 400 new ones outside the US.
Investors welcome the U-turn, improved Q3 outlook
As seen earlier, Victoria’s Secret’s plummeting sales have also hurt the company’s stock price in 2023.
However, the company’s U-turn on its woke endeavors has been welcomed by investors, with the stock soaring sharply this week.
At the time of writing, shares of Victoria’s Secret are standing at $17.91, up 3.8% on the day and more than 14.7% over the past five trading sessions.
The retailer’s improved Q3 outlook also contributed to the share price resurgence. Last week, the company said it expects adjusted operating loss to be in the range of $45 million to $65 million, narrower than the previous guidance of $45-$75 million.
It anticipates adjusted net loss per share to land between $0.7 and $0.9, down from the earlier $0.7 to $1 outlook.
Net sales in the third quarter are projected to slide between 3% and 5% year-over-year, compared with the previous guidance of the low- to mid-single-digit range fall.
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