The following is a summary of the Victoria's Secret & Co. (VSCO) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Victoria's Secret Q2 2024 total sales amounted to $1.4 billion, a marginal decrease of 1% from the previous year, but met their high-end expectations.

• Operating income showed growth for the first time since 2021 with a year-over-year increase in adjusted gross margin by 80 basis points and a decrease in adjusted SG&A dollars, leveraging by 20 basis points.

• Raised FY 2024 financial forecasts to reflect Q2 outperformance and anticipating modest improvement in fall. Expected adjusted operating income to be $275 million to $300 million and adjusted free cash flow to be $200 million to $225 million for 2024.

Business Progress:

• Continual quarterly sales improvement in North America with notable success in the online platform and innovative launches like the Victoria's Secret Dream bra and Featherweight Max front-close bra.

• Strong performance and positive consumer feedback on new back-to-campus event and introduction of new products signaling robust growth potential.

• International segments showed high-single digit growth driven mostly by U.K. partnerships and travel retail despite challenges in China.

• Plans to continue leveraging new product lines and brand events such as the return of the Victoria's Secret Fashion Show to boost sales and customer engagement in the upcoming quarters.

Opportunities:

• The introduction and robust customer engagement with new product lines such as the PINK back-to-campus events, Victoria's Secret Dream bra collection provide strong growth opportunities.

• Increased digital market share in bras and panties, alongside market share growth in sports bras, depicts an upward trajectory in digital engagement strategies.

Risks:

• Possible continued need for elevated promotional activities due to a competitive retail environment. Despite this, the segment-specific promotions are strategically poised to boost trial and traffic effectively.

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