Victoria's Secret Stock Slips On CFO Departure, Narrowed EPS Guidance: Retail’s Cautious

Shares of Victoria's Secret ($VSCO) slipped more than 5% on Wednesday after the lingerie and cosmetics retailer announced CFO changes and tightened its fourth-quarter outlook, dampening retail sentiment.

Narrowing its earnings per share guidance, Victoria's Secret said it expects fourth quarter adjusted EPS between $2.20 and $2.30 compared to $2.00 to $2.30.

The company has named Scott Sekella as CFO. Sekella most recently served as CFO of fabric and crafts retailer Joann and previously held financial leadership roles at Under Armour and Crocs.

Sekella will replace Timothy Johnson, CFO and chief administrative officer who will retire in June. 

Victoria's Secret 's net sales are now expected to grow by 3% to 4%, from the earlier expectation of 2% to 4%. The adjusted operating income is expected at $260 million and $270 million, compared to the previous guidance of $240 million and $270 million.

Consensus estimates for fourth-quarter peg earnings per share at $2.26 on revenues of $2.09 billion, according to Stocktwits data.

“I want to thank TJ for his partnership and support throughout my first several months as CEO and for staying on with the business until June to ensure a smooth transition with Scott,” Hillary Super, CEO of Victoria's Secret said.

Sentiment on Stocktwits turned ‘neutral’ from ‘bullish’. Message volumes were in the ‘extreneky high’ zone.

Super said in the company statement the company was  pleased with its holiday results and improved outlook for the fourth quarter.

"The momentum of our sales results for North America continued from third quarter through November and December across both our stores and digital channels, and our international business growth is also delivering on expectations," Super said. 

Goldman Sachs analyst Brooke Roach lowered the firm's price target to $35 from $40 and with a ‘Sell’ rating, Fly.com reported.

According to the analyst, the upshot from the company's holiday pre-announcement was "incrementally" encouraging even though its observations showed a larger Q4 earnings beat given traffic data trends during the key holiday season.

Victoria's Secret stock is down 12.7% year-to-date.

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