Victoria’s Secret has reported a net loss of $2.5 million for the first quarter, which set the company “off on the wrong foot” at the start of the year, according to an analyst.

Although the loss was driven by some higher tax charges related to previous acquisitions, lower operating margins reflected a softer performance, said GlobalData MD Neil Saunders.

Total sales for the 13 weeks ended May 4 fell 3.4 per cent, which is worse than the last quarter. Comparable sales were down 5 per cent compared to last quarter’s 6 per cent dip, but was off the back of a 14 per cent decline in the prior year.

While management said the results represented a “sequential improvement”, Saunders said the company has yet to turn a corner compared to last year.

“This should not come as any great surprise, as the reinvention plan the company is supposed to be delivering remains confused and muddled.

“We believe that this comes down to management not being fully confident in all aspects of the plan and therefore trying to test and learn as it moves forward, when what is really needed are bolder, more decisive initiatives,” the analyst elaborated.

Amid a tougher intimates market, Victoria’s Secret still underperforms compared to other key competitors, Saunders continued, suggesting that the company should be more aggressive about stimulating demand. Its revived fashion show is hoped to help accomplish this, but it must come with a reinvented format given previous scandals, he added.

“In the absence of this change, Victoria’s Secret will remain a significant company but will be one that continues to bump along the bottom,” Saunders concluded.

For the full year, the company expects net sales to be about $6.0 billion, down low-single digits compared to FY23.

“With some caution around the broader retail environment in North America, we are planning the business appropriately conservative in the near-term, but are encouraged by the start to May and the second quarter,” said CEO Martin Waters.