Victoria's Secret is broken.
Sales at stores open at least a year fell 7% during the company's most recent quarter, parent company L Brands (LB) said on Wednesday.
Despite a strong economy and consumers spending at stores like Walmart and Best Buy, Victoria's Secret struggled to draw customers during the holidays.
The company's profit during the quarter fell compared to last year. That signaled that L Brands, which also owns Bath & Body Works, resorted to discounting to clear out inventory. But even deep discounts were not enough to drive traffic.
Victoria's Secret's path to a turnaround looks challenging too. L Brands' forecast for 2019 disappointed Wall Street, sending its stock down 5% after-hours. L Brands will provide a clearer picture of its future on Thursday, when it hosts an earnings call with analysts.
Competition in the lingerie industry has increased in recent years. Startups like Adore Me and ThirdLove have broken Victoria's Secret's grip on the industry by selling better-fitting bras and using inclusive advertising.
Big retailers threaten Victoria's Secret, too. Target (TGT) launched a new bra and underwear brand for women and teenage girls called Auden on Monday. Auden bras will cost $22 and under. Lululemon (LULU) and Walmart (WMT) have also expanded their efforts in the space.
Although marketing trends in lingerie have shifted, Victoria's Secret has mostly stuck to the same playbook that helped it dominate the industry: push-up bras and celebrity models.
They're stuck between a rock and a hard place," Janine Stichter, analyst at Jefferies, recently told CNN Business.
"People identify Victoria's Secret with what's it been for the last 20 years — very sexy and airbrushed models," she said. "If they were going to pivot now, I don't think it would come off as authentic. They don't have a great option."