Victoria's Secret & Co. has recently released its annual report, providing detailed insights into its financial performance and operations. The company operates as a specialty retailer of women's intimate apparel, beauty products, and other apparel worldwide, offering a range of products under the Victoria's Secret, PINK, and Adore Me brands. It distributes its products through retail stores, websites, and other digital channels, as well as through franchise, license, and wholesale arrangements.
In its 10-K report for the year ended January 28, 2023, Victoria's Secret & Co. disclosed non-GAAP financial measures alongside its GAAP results. The company reported adjusted operating income of $327 million in 2023, down from $566 million in 2022. Adjusted net income attributable to Victoria's Secret & Co. was $178 million in 2023, compared to $416 million in 2022. The company also provided adjusted net income per diluted share, which stood at $2.27 in 2023, down from $4.95 in 2022.
The report also included a breakdown of the company-operated store data, revealing that sales per average selling square foot decreased by 11% in 2023 compared to 2022. Additionally, the report detailed the number of stores opened, closed, and reclassified for the same period, providing insights into the company's retail footprint.
In terms of financial performance, operating income decreased to $246 million in 2023 from $478 million in 2022, with a decrease in the operating income rate from 7.5% to 4.0%. Net sales for 2023 totaled $6.182 billion, down 3% from $6.344 billion in 2022. The report attributed the decline in net sales to a decrease in traffic, average unit retail, and conversion in the North America stores channel, partially offset by incremental net sales from the extra week in 2023.
Gross profit decreased to $2.242 billion in 2023, with a gross profit rate of 36.3%, up from 35.6% in 2022. General, administrative, and store operating expenses increased to $1.996 billion in 2023, reflecting a 12% increase from 2022. Interest expense also saw an increase, reaching $99 million in 2023, compared to the previous year.
The company's effective tax rate for 2023 was 21.4%, up from 19.0% in 2022, primarily due to foreign earnings taxed at a lower rate and the resolution of certain tax matters.
Today the company's shares have moved -1.0% to a price of $19.81. Check out the company's full 10-K submission here.
