Victoria’s Secret extends earnings selloff as Wells Fargo downgrades, says ‘turnaround isn’t turning’

Victoria’s Secret & Co (NYSE:)) shares fell more than 5% in early Thursday trade after the company reported mixed Q2 results.

of $0.24 came in worse than the consensus estimate of $0.27. Revenue was $1.43 billion, below the consensus estimate of $1.44B.

“We delivered second quarter sales, adjusted operating income and adjusted diluted earnings per share within our guidance range while the macro environment continues to put pressure on our customer base and our core intimates categories,” said CEO Martin Waters.

For Q3, the company expects EPS of ($0.70)-($1.00), much worse than the consensus estimate of ($0.14). Q3 net sales are expected to decrease in the low- to mid-single-digit range year-over-year.

For the full year, the company expects net sales to decrease in the low-single-digit range compared to last year, compared to the consensus estimate of approximately a 2% decrease.

Wells Fargo analysts downgraded shares to Equal Weight from Overweight with a price target lowered by $16 to $18 per share.

“VSCO once again cut their FY plan, as top-line trends/share dynamics remain unfavorable. Uncertainty on their ability to execute a turnaround is mounting and valuation should continue to erode,” analysts wrote.

BofA analysts lowered the price target by $5 to $25 per share but remain Buy-rated.

“We are encouraged by multiple opportunities to drive sales in 2H including continued traction from the ICON launch, turning PINK apparel, integrating Adore Me’s capabilities, and engagement from the VS World Tour,” the analysts said in their post-earnings report.

Additional reporting by Senad Karaahmetovic