What Happened?
Shares of intimatewear and beauty retailer Victoria’s Secret (NYSE:VSCO) jumped 9.4% in the afternoon session after data from Adobe Analytics, which tracks retail transactions, revealed that shoppers spent a record $10.8 billion online on Black Friday (2024), representing more than a 10% growth compared to the previous year, and more than double what consumers spent in 2017. This is a bullish 'read-through' for retailers and aligns with some of the positive sentiments and holiday spending trends observed by some of the companies that have reported this earnings season.
The shares closed the day at $41.91, up 7.8% from previous close.
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What The Market Is Telling Us
Victoria's Secret’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 32.1% on the news that the company reported fourth-quarter results with same-store sales and revenue missing expectations. In addition, its full-year revenue and operating income guidance missed consensus estimates, with the latter quite a large amount below expectations.
On the other hand, gross margin outperformed and led to a narrow EPS beat vs Wall Street's estimates. Overall, this was a pretty poor quarter for Victoria's Secret with the guidance surely dragging shares down.
Victoria's Secret is up 54.9% since the beginning of the year, and at $42 per share, has set a new 52-week high. Investors who bought $1,000 worth of Victoria's Secret’s shares at the IPO in July 2021 would now be looking at an investment worth $988.24.
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