Victoria’s Secret & Co. Provides First Quarter 2025 Preliminary Results and Update on Security Incident Involving Information Technology Systems
- Q1 2025 results exceeded guidance across all metrics with net sales reaching $1.35B
- Adjusted operating income of $32M surpassed the high-end guidance of $30M
- Adjusted EPS of $0.09 showed strong performance against guidance range of -$0.10 to $0.10
- Quick restoration of e-commerce website within 3 days of shutdown
- Security incident forced temporary shutdown of corporate systems and e-commerce website
- Company may face additional expenses and financial impacts in Q2 2025 due to the security breach
- Limited store functions were affected by the security incident
- Earnings release and call postponed due to system restoration process
Insights
VSCO faced a cybersecurity incident but showed strong Q1 results despite the breach, with ongoing system recovery efforts.
Victoria's Secret is managing a significant cybersecurity incident that began on May 24th when unauthorized network access was detected. The company responded by implementing containment protocols and temporarily shutting down both corporate systems and their e-commerce website, which demonstrates a standard incident response approach for large-scale breaches. While the e-commerce site was restored within three days (May 29th), the company is still working to restore full access to corporate systems - indicating this was likely a sophisticated attack with widespread impact.
The breach affected store operations with "certain limited functions" in physical retail locations, most of which have been restored. This suggests the attack may have targeted central systems that connect to point-of-sale terminals or inventory management. The company has appropriately engaged third-party experts to assist with remediation, which is standard best practice for incident response.
What's particularly noteworthy is the company's disclosure about ongoing financial impacts. While Q1 results were unaffected since they preceded the breach, the company explicitly warns that they "may continue to incur expenses and other financial impacts" related to this incident that could negatively impact Q2 2025 financial results. This suggests potential costs for forensic investigation, system remediation, potential legal liabilities, and possible regulatory penalties.
The postponement of the earnings call is a significant operational disruption, as it indicates that financial reporting systems were likely compromised or are inaccessible during the recovery process. The company's Board Audit Committee oversight signals the seriousness with which they're treating this incident, which aligns with governance best practices for cybersecurity events of this magnitude.
VSCO reports strong Q1 2025 performance exceeding guidance, but faces uncertainty from a cybersecurity incident affecting Q2 results.
Victoria's Secret's preliminary Q1 2025 results show remarkable financial outperformance across all key metrics. Net sales reached
The most substantial beat came in adjusted earnings per share, which reached
The financials reveal two significant non-recurring items affecting results:
However, the cybersecurity incident creates meaningful uncertainty for Q2 performance. While the e-commerce site was quickly restored (within 3 days), the company explicitly warns of potential financial impacts that could negatively affect Q2 results. These would include direct remediation costs, potential lost sales during system downtime, and possible longer-term impacts from customer trust issues. The incident's timing is particularly unfortunate given the strong momentum demonstrated in Q1, potentially interrupting what appeared to be positive business trends.
The postponement of the earnings call further complicates investor assessment, as detailed insights into the strong Q1 performance drivers and forward-looking guidance will be delayed until systems are fully restored.
First quarter 2025 earnings release and call webcast postponed
Company expects net sales, adjusted operating income, and adjusted diluted EPS for the first quarter to be near or exceed the high-end of previously issued guidance ranges
REYNOLDSBURG, Ohio, June 03, 2025 (GLOBE NEWSWIRE) -- Victoria’s Secret & Co. (“VS&Co” or the “Company”) (NYSE: VSCO) is providing an update on a recent security incident involving its information technology systems.
On May 24, 2025, the Company detected a security incident involving its information technology systems. The Company immediately enacted its response protocols to attempt to contain and eradicate unauthorized network access, and third-party experts were engaged.
As a precaution, the Company also temporarily shut down its corporate systems and e-commerce website on May 26, 2025. The website was restored on May 29, 2025 and work is ongoing to restore full access to corporate systems. The incident also affected certain limited functions in Victoria’s Secret and PINK stores, most of which have been restored.
The incident did not impact the Company’s financial results for the first quarter of fiscal 2025, which were near or exceeded the high-end of guidance as discussed below. However, the restoration process has prevented employees from accessing certain systems and information needed to support the Company’s release of its financial results for the first quarter ended May 3, 2025. As a result, the Company is postponing the date of its previously announced first quarter 2025 earnings release and earnings call webcast. The Company plans to announce a new earnings release and earnings call webcast date in due course.
The Company continues to assess the full scope and impact of the incident, under the oversight of the Audit Committee of the Board of Directors. Although this incident has not caused a material disruption to its operations to date, the Company has incurred, and may continue to incur, expenses and other financial impacts related to this incident, which could negatively impact its future financial results, including for the second quarter of fiscal 2025.
First Quarter 2025 Preliminary Financial Results
In conjunction with today’s announcement, the Company is providing preliminary results for the first quarter 2025. Net sales, adjusted operating income, and adjusted diluted earnings per share for the first quarter are expected to be near or exceed the high-end of previously issued guidance ranges as highlighted in the table below.
| First Quarter 2025 | ||||
| Preliminary Results | Prior Guidance | |||
| Net Sales | ||||
| Adjusted Operating Income | ||||
| Adjusted Net Income (Loss) Per Diluted Share | ( | |||
Adjusted operating income and adjusted diluted earnings per share are non-GAAP financial measures. At the conclusion of this press release, we have included more information regarding these non-GAAP financial measures, including a reconciliation of each non-GAAP financial measure to the most directly comparable financial measure computed in accordance with GAAP.
About Victoria’s Secret & Co.
Victoria’s Secret & Co. (NYSE: VSCO) is a specialty retailer of modern, fashion-inspired collections including signature bras, panties, lingerie, apparel, casual sleepwear, swim, lounge and sport, as well as award-winning prestige fragrances and body care. VS&Co is comprised of market leading brands, Victoria’s Secret and PINK, that share a common purpose of supporting women in all they do, and Adore Me, a technology-led, digital first innovative intimates brand serving women of all sizes and budgets at all phases of life. We are committed to empowering our more than 30,000 associates across a global footprint of approximately 1,380 retail stores in nearly 70 countries.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
We caution that any forward-looking statements (as such term is defined in the U.S. Private Securities Litigation Reform Act of 1995) contained in this press release or made by us, our management, or our spokespeople involve risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. Accordingly, our future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements, and any future performance or financial results expressed or implied by such forward-looking statements are not guarantees of future performance. Forward-looking statements include, without limitation, statements regarding our future operating results, the implementation and impact of our strategic plans, and our ability to meet environmental, social, and governance goals. Words such as “estimate,” “commit,” “will,” “target,” “goal,” “project,” “plan,” “believe,” “seek,” “strive,” “expect,” “anticipate,” “intend,” “continue,” “potential” and any similar expressions are intended to identify forward-looking statements. Risks associated with the following factors, among others, could affect our results of operations and financial performance and cause actual results to differ materially from those expressed or implied in any forward-looking statements:
- general economic conditions, inflation and changes in consumer confidence and consumer spending patterns;
- market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises or other major events, or the prospect of these events;
- uncertainty in the global trade environment, including the imposition or threatened imposition of tariffs or other trade restrictions;
- our ability to successfully implement our strategic plan;
- difficulties arising from changes and turnover in company leadership or other key positions;
- our ability to attract, develop and retain qualified associates and manage labor-related costs;
- our dependence on traffic to our stores and the availability of suitable store locations on satisfactory terms;
- our ability to successfully operate and expand internationally and related risks;
- the operations and performance of our franchisees, licensees, wholesalers and joint venture partners;
- our ability to successfully operate and grow our direct channel business;
- our ability to protect our reputation and the image and value of our brands;
- our ability to attract customers with marketing, advertising and promotional programs;
- the highly competitive nature of the retail industry and the segments in which we operate;
- consumer acceptance of our products and our ability to manage the life cycle of our brands, remain current with fashion trends, and develop and launch new merchandise, product lines and brands successfully;
- our ability to integrate acquired businesses and realize the benefits and synergies sought with such acquisitions;
- our ability to incorporate artificial intelligence into our business operations successfully and ethically while effectively managing the associated risks;
- our ability to source materials and produce, distribute and sell merchandise on a global basis, including risks related to:
- political instability and geopolitical conflicts;
- environmental hazards and natural disasters;
- significant health hazards and pandemics;
- delays or disruptions in shipping and transportation and related pricing impacts;
- foreign currency exchange rate fluctuations; and
- disruption due to labor disputes;
- our geographic concentration of production and distribution facilities in central Ohio and Southeast Asia;
- the ability of our vendors to manufacture and deliver products in a timely manner, meet quality standards and comply with applicable laws and regulations;
- fluctuations in freight, product input and energy costs;
- our and our third-party service providers’ ability to implement and maintain information technology systems and to protect associated data and system availability;
- our ability to maintain the security of customer, associate, third-party and company information;
- stock price volatility;
- shareholder activism matters;
- our ability to maintain our credit rating;
- our ability to comply with regulatory requirements; and
- legal, tax, trade and other regulatory matters.
Except as may be required by law, we assume no obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release to reflect circumstances existing after the date of this press release or to reflect the occurrence of future events, even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized. Additional information regarding these and other factors can be found in “Item 1A. Risk Factors” in our 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 2025.
For further information, please contact:
| Victoria’s Secret & Co.: | |
| Investor Relations: | Media Relations: |
| Kevin Wynk | Brooke Wilson |
| investorrelations@victoria.com | communications@victoria.com |
| VICTORIA'S SECRET & CO. | |||||
| NON-GAAP FINANCIAL INFORMATION | |||||
| (Unaudited) | |||||
| (In millions except per share amounts) | |||||
| In addition to our results provided in accordance with GAAP, provided below are non-GAAP financial measures that present operating income and net income (loss) per diluted share attributable to Victoria's Secret & Co. on an adjusted basis, which remove certain non-recurring, infrequent or unusual items that we believe are not indicative of the results of our ongoing operations due to their size and nature. The intangible asset amortization excluded from these non-GAAP financial measures is excluded because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. We use adjusted financial information as key performance measures of our results of operations for the purpose of evaluating performance internally. These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Instead, we believe that the presentation of adjusted financial information provides additional information to investors to facilitate the comparison of past and present operations. Further, our definition of non-GAAP financial measures may differ from similarly titled measures used by other companies. The table below reconciles the most directly comparable GAAP financial measure to each non-GAAP financial measure. | |||||
| First Quarter 2025 | |||||
| Reconciliation of Preliminary Results | |||||
| Preliminary Operating Income - GAAP | |||||
| Amortization of Intangible Assets (a) | |||||
| Restructuring and Other One-time Charges (b) | |||||
| Preliminary Adjusted Operating Income | |||||
| Preliminary Net Loss Per Diluted Share Attributable to Victoria's Secret & Co. - GAAP | ( | ||||
| Amortization of Intangible Assets (a) | |||||
| Restructuring and Other One-time Charges (b) | |||||
| Preliminary Adjusted Net Income Per Diluted Share Attributable to Victoria's Secret & Co. | |||||
| (a) | In the first quarter of 2025, we recognized amortization expense of | ||||
| (b) | In the first quarter of 2025, we recognized pre-tax charges of | ||||
FAQ
What caused Victoria's Secret (VSCO) to delay its Q1 2025 earnings release?
How did Victoria's Secret (VSCO) perform in Q1 2025 compared to guidance?
When did Victoria's Secret (VSCO) restore its e-commerce website after the security incident?
What potential impact will the security incident have on Victoria's Secret's Q2 2025 results?
How many retail stores does Victoria's Secret (VSCO) operate globally?
