Shoppers walk past a Victoria’s Secret store in a mall in San Diego, California on April 22, 2021.
Bing Guan | Bloomberg | Getty Images
Victoria’s Secret shares fall while Bath & Body Works shares rise after the two retailers first released their respective quarterly results as separate companies.
Both companies were previously part of L Brands, but Victoria’s Secret was spun off earlier this month.
Victoria’s Secret shares fell about 6% in Thursday morning trading to just over $ 67, while Bath & Body Works shares rose more than 7% to nearly $ 63. Both stocks had rallied in recent weeks as investors expected companies to do more on their own.
Bath & Body Works has a larger market value of $ 16.82 billion while Victoria’s Secret is worth approximately $ 5.95 billion.
In the midst of a turnaround, Victoria’s Secret announced on Wednesday that sales rose from $ 1.07 billion a year ago to $ 1.61 billion. But revenues have not yet returned to pre-pandemic levels, even as consumers return to stores to freshen up their cabinets.
The company also refrained from providing an outlook for the year as a whole. It said it was still facing uncertainty from the Covid pandemic, which made forecasting consumer demand all the more difficult.
The lingerie maker’s supply chain disruption caused by Covid is also expected to add up to $ 100 million to freight and product costs in the fall season and hurt fourth-quarter profitability, Victoria’s Secret said.
Telsey Advisory Group cut its price target on Victoria shares from $ 76 to $ 73 following the results. Sales came to light last quarter and the retailer’s guidance for the third quarter was below consensus estimates, analyst Dana Telsey said in a statement to customers.
Bath & Body Works meanwhile announced that sales for the most recent period were $ 1.70 billion, up 54% from 2019 levels.
The lotion and hand sanitizer maker has seen increased demand for its products during the pandemic. The company added that it is optimistic about its range of fall and holiday items, which should gain momentum in the second half of the year.
Wells Fargo analyst Ike Boruchow maintained a target price of $ 80 on the stock and said Bath & Body Works remains a “best-in-class story” in the retail industry today.
