The US lingerie supplier Victoria’s Secret & Co. made significant progress in terms of sales and earnings in the 2021/22 financial year. In recent months, however, the company has felt the effects of global supply bottlenecks. The group warned in a statement published on Wednesday evening that the adverse conditions would continue to weigh on the results in the coming weeks.
In the fiscal year ended Jan. 29, sales were $6.78 billion, up 25.3 percent from the prior year. The main reason for the significant increase was the recovery in demand in the stationary stores, which were temporarily closed in the previous year as a result of the Covid 19 pandemic. Sales in the North American branches grew by 50.1 percent to 4.19 billion US dollars. In e-commerce there, sales fell by 4.9 percent to 2.11 billion US dollars, in international business they grew by 20.5 percent to 476.2 million US dollars.
The strong sales growth ensured that the lingerie supplier returned to profitability despite higher costs. Operating income reached $869.5 million after posting an operating loss of $101.5 million the previous year. Net income was $646.4 million (€583.2 million). In 2020/21, Victoria’s Secret reported a deficit of $72.3 million.
In the fourth quarter, however, the upward trend was slowed down considerably: At 2.18 billion US dollars, sales were only 3.8 percent above the level of the same period last year. Net income even shrank by 12.9 percent to $246.1 million. The company justified the decline with increased costs along the supply chain and the discontinuation of the stimulus program with which the US government had boosted demand last year.
The company warned that the cost pressure on the supply chains would continue in the early part of the current financial year. For the first quarter, it therefore forecast a decline in sales compared to the same period last year and a significantly lower result. The losses should then be made up again in the following months: the operating profit in 2022/23 will probably be in the range of the previous year’s level, explained the clothing manufacturer. The company also expects hardly any changes in annual sales: the target corridor is between the previous year’s level and an increase “by a low single-digit percentage”.