Victoria's Secret & Co Q2 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Matthew Boss - JPMorgan - Analyst : Great, thanks. So, maybe a two-part question, Martin, first, what inning do you see AUR expansion here today in terms of moving forward? And with that, do you see merchandise margin levels exiting this year as sustainable or any giveback that we need to consider? And T.J., on SG&A reinvestments that I know were embedded in the mid-teens margin plan, is it best to think about investments from here as linear over the three- to five-year plan? Or any timing to consider as we would think about on an annual basis next year relative to the back end of the plan?

Question: Matthew Boss - JPMorgan - Analyst : Great, best of luck.

Question: Roxanne Meyer - MKM Partners - Analyst : Great, good morning and congrats on a solid quarter and a successful separation. My question is around third quarter. The start to third quarter, you provided some guidance. I'm just wondering if you could give us a little bit more color about the start? And in that context, talk about the new bra launch last week, which is exciting to see, a new recent athletic launch. How impactful and needle moving can launches like this be to sales? And then just as a follow-up, as we appreciate the supply chain disruptions that are out there, how should we think about what percentage of your sales are historically chased in the second half? How to think about what could be left on the table and capped if there are indeed disruptions? Thank you.

Question: Roxanne Meyer - MKM Partners - Analyst : It does. Thanks and best of luck.

Question: Ike Boruchow - Wells Fargo - Analyst : Good morning, everyone. Just two questions from me. On the revenue guide for the quarter, the mid- to high single, I'm just kind of curious the component -- the direct and store, should direct remain negative given you still have some pretty robust compares. Just curious on that mix. And then maybe, Martin -- just the 7% dilution from the 88 million shares, I'm trying to understand what exactly is driving that? And then is there an expectation of that to go even further or higher over the next quarter or so, or is 93 million kind of the right way to be?

Question: Kimberly Greenberger - Morgan Stanley - Analyst : Great, thank you so much. Just if my math is correct here, it looks like the exit rate coming out of the second quarter actually accelerated maybe relative to what you had been trending at previously. It's possible that I'm off here, but it looks like maybe running low to mid-teens on a year-over-year basis. And I'm looking at the Q3 guide. It just looks like maybe you are embedding a little bit of deceleration for third quarter in the mid- to high

Question: Kimberly Greenberger - Morgan Stanley - Analyst : Fantastic, thanks.

Question: Omar Saad - Evercore ISI - Analyst : Thanks for taking my question, good morning. I wanted to ask for maybe a little bit of update on the brand evolution that you guys have been undergoing for a while, how that's resonating with consumers. Any thoughts on what that means for product and category mix, growth and profitability, if it does play out in terms of the products and categories that you sell most? Thanks.

Question: Omar Saad - Evercore ISI - Analyst : Great color, Martin, thank you.

Question: Janine Stichter - Jefferies LLC - Analyst : I wanted to ask a bit more about the OnPoint active launch we noticed in stores. It seems like a pretty big departure from what you've done in active before. So, maybe just elaborate on the opportunity for that category, what you're seeing in the initial uptake, and the broad strategy for active just knowing it's gone through some fits and starts over the years. Thank you.

Question: Janine Stichter - Jefferies LLC - Analyst : Helpful color, thank you very much.

Question: Simeon Siegel - BMO Capital Markets - Analyst : Thanks, hey, good morning, everyone. Congrats on the separation and the ongoing progress of the business. How are you guys thinking about long-term gross margin from here? Maybe how you're benchmarking your opportunity? And then just given all the successful initiatives you've done last year, could you share the occupancy dollars you'd expect on an annualized basis at this point? Thanks.

Question: Simeon Siegel - BMO Capital Markets - Analyst : Great. Best of luck for the rest of the year.

Question: Susan Anderson - B. Riley - Analyst : Good morning, thanks for taking my question, nice job on the quarter. I guess maybe if you could talk a little bit about Pink. Maybe you could talk about the growth in the second quarter and what did well between loungewear and lingerie. And then also the start to back-to-school, what trends you are seeing there so far. Thanks.

Question: Susan Anderson - B. Riley - Analyst :