vsco-20220430

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 10-Q

_________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-40515

_________________________________

VICTORIA'S SECRET & CO.

(Exact name of registrant as specified in its charter)

_______________________________

Delaware

86-3167653

(State or other jurisdiction of
incorporation or organization)

(IRS Employer Identification No.)

4 Limited Parkway East

Reynoldsburg,

Ohio

43068

(Address of principal executive offices)

(Zip Code)

(614)

577-7000

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	VSCO	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

As of May 27, 2022, the number of outstanding shares of the Registrant’s common stock was 83,078,907 shares.

Table of Contents

VICTORIA'S SECRET & CO.

TABLE OF CONTENTS


			Page No.
Part I. Financial Information

Item 1. Financial Statements *

Consolidated and Combined Statements of Income for the Thirteen-Weeks Ended April 30, 202 2 and Ma y 1, 202 1 (Unaudited)			3

Consolidated and Combined Statements of Comprehensive Income for the Thirteen-Weeks Ended April 30, 202 2 and May 1, 202 1 (Unaudited)			3

Consolidated and Combined Balance Sheets as of April 30, 202 2 (Unaudited), January 2 9 , 202 2 and May 1, 202 1 (Unaudited)			4

Consolidated and Combined Statements of Equity for the Thirteen-Weeks Ended April 30, 202 2 and May 1, 202 1 (Unaudited)			5

Consolidated and Combined Statements of Cash Flows for the Thirt een -Weeks Ended April 30, 202 2 and May 1, 202 1 (Unaudited)			6

Notes to Consolidated and Combined Financial Statements (Unaudited)			7

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995			19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			20

Item 3. Quantitative and Qualitative Disclosures About Market Risk			30

Item 4. Controls and Procedures			31

Part II. Other Information			32

Item 1. Legal Proceedings			32

Item 1A. Risk Factors			32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			32

Item 3. Defaults Upon Senior Securities			33

Item 4. Mine Safety Disclosures			33

Item 5. Other Information			33

Item 6. Exhibits			33

Signature			34


*			Victoria's Secret & Co.'s fiscal year ends on the Saturday nearest to January 31. As used herein, “first quarter of 2022” and “first quarter of 2021” refer to the thirteen-week periods ended April 30, 2022 and May 1, 2021, respectively.

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

VICTORIA'S SECRET & CO.

CONSOLIDATED AND COMBINED STATEMENTS OF INCOME

(in millions except per share amounts)

(Unaudited)


	First Quarter
	2022		2021
Net Sales	$	1,484	$	1,554
Costs of Goods Sold, Buying and Occupancy	(962)		(882)
Gross Profit	522		672
General, Administrative and Store Operating Expenses	(428)		(446)
Operating Income	94		226
Interest Expense	(12)		(1)
Other Loss	(4)		—
Income Before Income Taxes	78		225
Provision for Income Taxes	2		51
Net Income	76		174
Less: Net Loss Attributable to Noncontrolling Interest	(5)		—
Net Income Attributable to Victoria's Secret & Co.	$	81	$	174
Net Income Per Basic Share Attributable to Victoria's Secret & Co.	$	0.96	$	1.97
Net Income Per Diluted Share Attributable to Victoria's Secret & Co.	$	0.93	$	1.97

VICTORIA'S SECRET & CO.

CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

(Unaudited)


	First Quarter
	2022		2021
Net Income	$	76	$	174
Other Comprehensive Income (Loss), Net of Tax:
Foreign Currency Translation	1		4
Unrealized Loss on Cash Flow Hedges	—		(1)
Amounts Reclassified from Accumulated Other Comprehensive Income to Paid-in Capital	3		—
Total Other Comprehensive Income, Net of Tax	4		3
Total Comprehensive Income	80		177
Less: Net Loss Attributable to Noncontrolling Interest	(5)		—
Less: Foreign Currency Translation Attributable to Noncontrolling Interest	1		—
Comprehensive Income Attributable to Victoria's Secret & Co.	$	84	$	177

The accompanying Notes are an integral part of these Consolidated and Combined Financial Statements.

Table of Contents

VICTORIA'S SECRET & CO.

CONSOLIDATED AND COMBINED BALANCE SHEETS

(in millions except par value amounts)


	April 30, 2022		January 29, 2022		May 1, 2021
	(Unaudited)				(Unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	204	$	490	$	332

Accounts Receivable, Net	152		162		111
Inventories	1,046		949		761

Other	112		90		95
Total Current Assets	1,514		1,691		1,299
Property and Equipment, Net	901		957		1,036
Operating Lease Assets	1,299		1,369		1,602

Trade Name	246		246		246
Deferred Income Taxes	17		17		13
Other Assets	88		64		51
Total Assets	$	4,065	$	4,344	$	4,247
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable	$	443	$	538	$	366
Accrued Expenses and Other	607		714		693
Current Debt	4		4		—
Current Operating Lease Liabilities	299		340		356
Income Taxes	98		102		29
Total Current Liabilities	1,451		1,698		1,444
Deferred Income Taxes	63		58		45
Long-term Debt	977		978		—
Long-term Debt due to Former Parent	—		—		97
Long-term Operating Lease Liabilities	1,274		1,314		1,541
Other Long-term Liabilities	49		39		113
Total Liabilities	3,814		4,087		3,240
Shareholders' Equity:
Preferred Stock — $0.01 par value; 10 shares authorized; none issued	—		—		—
Common Stock — $0.01 par value; 1,000 shares authorized; 83, 85, and 0 shares issued and outstanding, respectively	1		1		—
Paid-in Capital	166		125		—
Accumulated Other Comprehensive Income	8		5		7
Retained Earnings	52		126		—
Net Investment by Former Parent	—		—		1,000
Total Victoria's Secret & Co. Shareholders' Equity	227		257		1,007
Noncontrolling Interest	24		—		—
Total Equity	251		257		1,007
Total Liabilities and Equity	$	4,065	$	4,344	$	4,247

The accompanying Notes are an integral part of these Consolidated and Combined Financial Statements.

Table of Contents

VICTORIA'S SECRET & CO.

CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY

(in millions)

(Unaudited)

First Quarter 2022


	Common Stock					Accumulated Other Comprehensive Income		Retained Earnings		Treasury Stock, at Average Cost		Total Victoria's Secret & Co. Equity
	Shares Outstanding	Par Value		Paid-in Capital										Noncontrolling Interest		Total Equity
Balance, January 29, 2022	85	$	1	$	125	$	5	$	126	$	—	$	257	$	—	$	257
Net Income (Loss)	—	—		—		—		81		—		81		(5)		76
Other Comprehensive Income	—	—		—		3		—		—		3		1		4
Total Comprehensive Income (Loss)	—	—		—		3		81		—		84		(4)		80

SEC Form 10-Q filed by Victorias Secret & Co.