Victoria's Secret & Co Q2 2024 Earnings Call Transcript

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

Question: Ike Boruchow - Wells Fargo - Analyst : Hi, good morning, TJ. Congrats on the results. Two from me. Just first real quick on the model, you talked about international high singles. Sounds like you're confident. Can you just tell us what you're expecting from the international segment in the back half of the year? And then, could you just elaborate further on the promo environment that you're seeing and what you're basically baking into your plan? I'm most curious what kind of promo/gross margin outlook you could maybe share with us for the fourth quarter specifically? Thanks.

Question: Ike Boruchow - Wells Fargo - Analyst : Could you say gross margins will be up or down in the fourth quarter?

Question: Ike Boruchow - Wells Fargo - Analyst : Perfect. Thank you.

Question: Alex Straton - Morgan Stanley - Analyst : Great, thanks so much. I just have a couple for you both. So just on the sales guidance raised for the year, I know you said you did that in bed, you know the back half outlook being slightly better than the previous. Can you talk to us about where you've grown more optimistic about banner or geography or category? Just so we understand that a little bit more. And then just a quick follow-up on your promo color that you just gave, which was super helpful. I'm just wondering bigger picture or do you feel like you guys are at the right promotional levels or is it still too elevated compared to what you think of as like a steady state level for the brand? Thanks a lot.

Question: Alex Straton - Morgan Stanley - Analyst : Great. Good luck.

Question: Corey Tarlowe - Jefferies - Analyst : Great. Thanks, and good morning. TJ, I wanted to ask about PINK because you highlighted an improvement there. And I know that you've used a fair amount of newness in that segment. Can you talk a little bit about what you feel is working with that segment and what you think that trajectory might look like into the back half? Thanks so much.

Question: Corey Tarlowe - Jefferies - Analyst : Great. Thanks so much and best of luck. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 29, 2024 / 12:00PM, VSCO.N - Q2 2024 Victoria's Secret & Co Earnings Call

Question: Brooke Roach - Goldman Sachs - Analyst : Good morning, and thank you for taking our question. I was hoping you could speak to the drivers of the better SG&A cost control that you saw in the quarter. Could you provide a few examples of where you're finding those efficiencies? And then as you look ahead, how are you thinking about the cadence of SG&A dollar growth in the back half of the year and any additional leverage that you might be pulling there?

Question: Brooke Roach - Goldman Sachs - Analyst : Great, thanks so much. I'll pass it on.

Question: Mauricio Serna - UBS - Analyst : Great. Good morning. Thanks for taking my questions. I wanted to ask. About you know the third-quarter guidance, you know, it calls for a sequential improvement. I just want to understand like from a business from a segment standpoint, what segments are driving that improvement? Is it like across the board? Or anything in particular? And then like as you think about that improvement, just focus on the North America intimate market, you were mentioning that it got softer, kind of slightly softer in second quarter, what are your expectations for like the industry growth of the intimate -- North America intimates industry growth for the second half of the year? Thank you.

Question: Mauricio Serna - UBS - Analyst : Got it. And just a quick follow-up on gross margin. One of the things I noted in the in the commentary provided for Q3 is you called out transportation costs on ocean and air. Maybe you could elaborate a little bit more like what kind of impact that you expecting in Q3 gross margin and that's only like a one-time thing or is this something that we should be maybe considering for Q4 and maybe going into fiscal year '25? Thank you.

Question: Mauricio Serna - UBS - Analyst : Got it, very helpful. That's also why you think like merchandise margins in Q4 might be down a little bit? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 29, 2024 / 12:00PM, VSCO.N - Q2 2024 Victoria's Secret & Co Earnings Call

Question: Mauricio Serna - UBS - Analyst : Got it. Understood. Very helpful. Excellent. Thanks.

Question: Simeon Siegel - BMO Capital Markets - Analyst : Thanks. Hey, guys. Morning. Hope you have a nice summer, and congrats on some really nice improvement. I apologize I got disconnected. So if you already answer any of these, just disregard. I'll get it from the transcript. Sorry about that. So could you quantify the puts and takes behind the gross margin improvement this quarter and how you're thinking about those drivers going forward? What do you expect buying and occupancy dollars to look like going forward, recognizing the comment from this quarter? And then with the fashion show returning, how are you thinking about marketing dollars this year? So have any -- have you said any of those before, I'll get them again. And then just higher level -- or I'll get them from the script, [to save] again. And then just higher level, the EBIT dollar growth was great, so that was really encouraging. Could you speak to your comfort in continuing that inflection going forward? Is this the beginning of that turn? Thank you.

Question: Simeon Siegel - BMO Capital Markets - Analyst : Yeah. the EBIT dollar from our growing the inflecting. So just comfort in that continuing this being the beginning of a trend because that's obviously very encouraging. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 29, 2024 / 12:00PM, VSCO.N - Q2 2024 Victoria's Secret & Co Earnings Call

Question: Jonna Kim - TD Cowen - Analyst : Thanks for taking my question. Just a quick one for me. You mentioned Adore Me grew [hiking] revisit this quarter. Just curious what were the drivers behind it when what you're assuming for the back half for the brand? Thank you.