Victoria's Secret&Co.

Overview Key strengths Key risks Leading market position and strong brand name recognition as the largest retailer of intimate apparel. Participation in the intensely competitive and fashion-sensitive women's intimate apparel segment. Decent scale and geographic diversification, with an increasing international presence through franchise operations. Historical merchandising missteps and weak track record of store development. Good digital penetration of more than 30% of sales in fiscal 2021. Intense execution risk related to strategic initiatives, amplified by macroeconomic headwinds such as weakening demand and rising operating costs. Victoria?s Secret&Co. (VS) reported comparable sales growth of 3% and S&P Global Ratings-adjusted EBITDA margins of nearly 25% in fiscal 2021 (ended Jan. 29, 2022), in line with our expectations. This reflected improved

... remain, despite improving performance trends. Victoria's Secret & Co. (VS) reported comparable sales growth of 3% and S&P Global Ratings-adjusted EBITDA margins of nearly 25% in fiscal 2021 (ended Jan. 29, 2022), in line with our expectations. This reflected improved demand for its product offering, likely due to the early execution of brand transformation initiatives and pent-up demand supported by consumers' financial health. Moreover, increased full-price selling of products led to fewer markdowns and expanded merchandise margin. We anticipate the company will increase promotional activity from depressed levels as consumer demand weakens in an inflationary environment, reducing margins from currently...

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