U.S.-based intimates retailer Victoria?s Secret&Co.'s (VS) fiscal-year 2024 outlook was weaker than we expected, particularly due to the delayed progress on its business turnaround strategy. We believe this will lead to ongoing sales declines, reduced EBITDA generation, and elevated leverage over the next 12 months. Therefore, we revised our outlook on VS to negative from stable and affirmed all our ratings, including the 'BB-' issuer credit rating. The negative outlook reflects the risk that persistently weak demand for VS' products, due to its lack of material progress on its turnaround initiatives, will lead to a weaker-than-expected operating performance and sustained higher leverage. We now forecast VS' sales will decline by the low-single-digit percent area in fiscal year 2024
