Victoria's Secret & Co (VSCO)
Interest coverage
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 309,000 | 239,000 | 246,000 | 477,000 | 487,000 |
| Interest expense | US$ in thousands | 86,000 | 99,000 | 99,000 | 60,000 | 60,000 |
| Interest coverage | 3.59 | 2.41 | 2.48 | 7.95 | 8.12 |
January 31, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $309,000K ÷ $86,000K
= 3.59
Victoria's Secret & Co's interest coverage ratio has shown some fluctuations over the years. In January 2023, the interest coverage ratio was 8.12, indicating that the company generated 8.12 times more operating income than the interest expense for that period. This high ratio suggests a healthy ability to meet its interest obligations.
However, in the following year, the ratio decreased to 7.95, still signaling strong interest coverage. Yet, by January 2024 and February 2024, the interest coverage ratio fell significantly to 2.48 and 2.41, respectively. These lower ratios indicate that Victoria's Secret & Co's operating income was only sufficient to cover its interest expenses around 2.5 times. This could suggest a potential decrease in the company's profitability or an increase in its interest expenses during these periods.
By January 2025, the interest coverage ratio improved to 3.59, indicating a better ability to cover interest costs compared to the previous year. Overall, while the company experienced some fluctuations in its interest coverage ratio over the years, maintaining a ratio above 3 is generally considered healthy. Investors and stakeholders should continue monitoring Victoria's Secret & Co's ability to generate sufficient operating income to cover its interest expenses in the future.
Peer comparison
Jan 31, 2025