Intimatewear and beauty retailer Victoria’s Secret (NYSE: VSCO) will be reporting results tomorrow before market open. Here’s what to look for.
Victoria's Secret beat analysts’ revenue expectations by 1% last quarter, reporting revenues of $2.11 billion, up 1.1% year on year. It was a satisfactory quarter for the company, with an impressive beat of analysts’ EBITDA estimates but a miss of analysts’ gross margin estimates.
Is Victoria's Secret a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Victoria's Secret’s revenue to decline 1.7% year on year to $1.34 billion, improving from the 3.4% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.04 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Victoria's Secret has missed Wall Street’s revenue estimates three times over the last two years.
Looking at Victoria's Secret’s peers in the apparel retailer segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Urban Outfitters delivered year-on-year revenue growth of 10.7%, beating analysts’ expectations by 2.5%, and Gap reported revenues up 2.2%, topping estimates by 1.3%. Urban Outfitters traded up 23% following the results while Gap was down 20.1%.
Read our full analysis of Urban Outfitters’s results here and Gap’s results here.
There has been positive sentiment among investors in the apparel retailer segment, with share prices up 14.3% on average over the last month. Victoria's Secret is up 6.8% during the same time and is heading into earnings with an average analyst price target of $23 (compared to the current share price of $20.30).
When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.
