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Investing.com -- Shares of Victoria’s Secret & Co. (NYSE: VSCO) tumbled as much as 10% following the company’s announcement of a security incident that has led to the temporary shutdown of its website and some in-store services. The retailer is actively working to resolve the issue and has maintained that its physical stores remain open.
The drop in the stock price can be attributed to the immediate impact of the security incident, which has disrupted the company’s online operations since Monday, coinciding with the Memorial Day weekend—a key sales period for retail. The inability for customers and workers to place online orders is seen as a significant setback for the company’s near-term e-commerce performance.
Wells Fargo (NYSE:WFC) analyst Ike Boruchow maintained an Underweight rating on Victoria’s Secret, with a price target of $15.00. In his analysis, Boruchow pointed out the stock’s decline in relation to the current e-commerce challenges, stating, "We believe the stock is selling off today (-7% vs. SPX flat), due to NT challenges in e-comm—with VSCO websites/apps down since Monday (Memorial Day)—compounding recent weaker trends as customers/workers can’t place online orders." The disruption is not only a concern for the immediate loss of sales but also raises questions about the nature and extent of the security incident, with little information available on the cause or the expected timeline for a resolution.
Store associates from various U.S. locations have provided mixed responses regarding the potential duration of the online outage, with some indicating that the interruption could last an additional 1-2 days. This suggests a total interruption of Victoria’s Secret’s online business that could span 4-5 days, further exacerbating the situation.
The lack of detailed communication from the company about the security incident, including the absence of updates on social media platforms, has added to the uncertainty surrounding the event. This incident comes at a time when e-commerce is increasingly important for retail companies, and any disruption can have significant repercussions on customer trust and financial performance.