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Victoria's Secret (VSCO)
NYSE:VSCO
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Victoria's Secret
(NYSE:VSCO)
Rating:61Neutral
Price Target:
$19.50
▲(5.98%Upside)
Positive Factors
Brand Differentiation
Marketing is a key priority with the goal of better differentiating the VS and PINK brands and gaining new customers.
Digital and Inventory Management
VSCO's International and digital performed well, and inventories remain under control.
International Performance
VSCO's international revenue grew 9% year-over-year, with management expecting continued strength ahead.
Negative Factors
Intimates Category Challenges
Continued pressure in intimates as younger customers are interacting with the category differently, particularly bras.
Tariffs Impact on Margins
The full-year earnings guidance was lowered entirely due to tariffs and may not be fully de-risked.
Technology and Security Issues
Management is postponing its 1Q call due to a security incident that impacted the company's corporate systems, e-commerce website, and certain functions in Victoria’s Secret and PINK stores.
Victoria's Secret (VSCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.47B
Dividend YieldN/A
Average Volume (3M)3.52M
Price to Earnings (P/E)9.2
Beta (1Y)1.71
Revenue Growth1.45%
EPS Growth59.09%
CountryUS
Employees13,000
SectorConsumer Cyclical
Sector Strength57
IndustryApparel - Retail
Share Statistics
EPS (TTM)0.09
Shares Outstanding79,852,500
10 Day Avg. Volume4,181,005
30 Day Avg. Volume3,518,291
Financial Highlights & Ratios
PEG Ratio8.65
Price to Book (P/B)2.27
Price to Sales (P/S)0.00
P/FCF Ratio7.09
Enterprise Value/Market Cap2.83
Enterprise Value/Revenue0.17
Enterprise Value/Gross Profit1.84
Enterprise Value/Ebitda1.92
Forecast
1Y Price Target
$22.00Price Target Upside19.57% Upside
Rating ConsensusHold
Number of Analyst Covering11
Victoria's Secret Business Overview & Revenue Model
Company DescriptionVictoria's Secret & Co. operates as a specialty retailer of women's intimate, personal care, and beauty products worldwide. The company offers bras, panties, lingerie, sleepwear, loungewear, and athletic attire and swimwear, as well as fragrances and body care products, and accessories under the Victoria's Secret and PINK brands. As of March 2, 2022, it operated approximately 1,400 retail stores. The company was incorporated in 2021 and is headquartered in Reynoldsburg, Ohio.
How the Company Makes MoneyVictoria's Secret makes money through the sale of its products in both physical retail locations and online platforms. The company's primary revenue streams include sales from its extensive network of stores as well as its e-commerce operations. Additionally, Victoria's Secret benefits from its strong brand recognition and customer loyalty, which drive substantial traffic and sales. The company also engages in strategic partnerships and collaborations to expand its product offerings and market reach, further contributing to its revenue. Seasonal promotions, loyalty programs, and exclusive product lines are employed to enhance customer engagement and sales performance.
Victoria's Secret Earnings Call Summary
Earnings Call Date:Jun 11, 2025
(Q1-2025)
| % Change Since: -17.12%|
Next Earnings Date:Aug 27, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several positive developments such as exceeding expectations in Q1 2025, strong international growth, and strategic hires. However, the call also acknowledged challenges, including flat net sales, security incidents, and ongoing tariff pressures, leading to a balanced view of the company's position.Q1-2025 Updates
Positive Updates
Exceeded Expectations in Q1 2025
Victoria's Secret & Co. delivered first-quarter net sales of $1.353 billion and adjusted operating income of $32 million, both exceeding guidance ranges. Adjusted net income per diluted share was $0.09.
International Growth
International sales grew 9% to nearly $200 million with strong high single-digit growth. The China business showed strong double-digit growth, primarily driven by digital channels.
Strong Performance in Beauty Segment
Beauty segment achieved its seventh consecutive quarter of growth, with Bombshell's fifteenth anniversary contributing significantly.
Positive Momentum in Pink and VSX
Pink Apparel had its third consecutive quarter of positive comps, and VSX sports bras saw double-digit growth, with a 20% increase in the quarter.
Strategic Leadership Hires
Announced new brand presidents and a Chief Marketing Officer, aiming to drive sustained growth and strategic vision.
Store of the Future Expansion
Planned expansion of the Store of the Future concept, expected to represent 25% of the North American fleet by year-end.
Negative Updates
Flat Net Sales and 1% Comparable Sales Decline
Net sales for Q1 were flat, and total comparable sales were down 1% compared to the previous year.
Security Incident Impact
A security incident required taking some internal systems and e-commerce sites offline, impacting Q2 sales forecast by approximately $20 million.
Gross Margin Pressure
Adjusted gross margin rate declined by 170 basis points to 35.2%, below the guidance of 36.5%, due to elevated airfreight rates, tariff-related order adjustments, and higher GWP activity.
Tariff Headwinds
Tariff impacts expected to result in approximately $50 million net impact for fiscal year 2025, with ongoing mitigation strategies.
Challenges in Intimates and Panties
The intimates market continues to be pressured, with a decline in share in Q1. Panties business was softer throughout the quarter.
Company Guidance
During Victoria's Secret & Co.'s first-quarter earnings call for fiscal year 2025, the company reported net sales of $1.353 billion and an adjusted operating income of $32 million, both exceeding their initial guidance. The adjusted net income per diluted share was $0.09, slightly below the upper end of the guidance range. The company maintained its forecast for fiscal year 2025 net sales between $6.2 billion and $6.3 billion, and expects adjusted operating income to range from $270 million to $320 million. The call highlighted key strategic priorities, including innovation in product lines, particularly in the Pink and Beauty segments, which showed robust growth. The company noted a 9% growth in international sales, with significant contributions from China. For the second quarter, net sales are projected between $1.38 billion and $1.41 billion, accounting for a $20 million impact from a recent security incident. Adjusted operating income is anticipated to be between $15 million and $35 million. The fiscal year guidance includes a gross tariff impact of approximately $120 million, with mitigation efforts projected to reduce this to a net impact of $50 million. The company plans capital expenditures of around $220 million for fiscal year 2025, while aiming for an adjusted free cash flow of $150 million to $200 million.Victoria's Secret Financial Statement Overview
Summary
Victoria's Secret shows a mixed financial performance. Despite maintaining decent profitability margins and strong cash flow management, the company faces challenges with declining revenue and high leverage. Improving revenue growth and reducing leverage are essential for enhancing financial stability.Income Statement
Victoria's Secret shows a mixed performance in its income statement. The company experienced a decline in total revenue over the past year, dropping from $6.78 billion in 2022 to $6.22 billion in TTM (Trailing-Twelve-Months). Gross profit margin stands at 36.3% for TTM, indicating decent profitability, while the net profit margin is relatively low at 2.7%. The EBIT margin is at 4.9% and EBITDA margin at 7.9%, reflecting moderate operational efficiency. The revenue growth rate has seen a negative trajectory over recent periods, indicating challenges in maintaining sales momentum.67
Positive
Balance Sheet
The balance sheet analysis reveals some financial stability concerns. Victoria's Secret has a high debt-to-equity ratio of 4.38 in TTM, suggesting significant leverage and potential risk in financial stability. However, the equity ratio has improved to 14.1%, showing an increase in shareholder equity relative to total assets. The return on equity (ROE) is 26%, indicating effective use of equity to generate profits, although this is offset by high leverage.58
Neutral
Cash Flow
The cash flow statement reflects robust operating cash flow of $391 million in TTM, indicating strong cash generation capabilities. The free cash flow to net income ratio is 1.25, showcasing efficient conversion of income into free cash flow. However, free cash flow growth has been inconsistent, with a decline from recent years, suggesting fluctuations in cash flow generation. Despite this, the company maintains a healthy operating cash flow to net income ratio of 2.33, showing sound cash flow management.72
Positive
| Breakdown | |||||
| TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 6.22B | 6.23B | 6.18B | 6.34B | 6.78B | 5.41B | Gross Profit |
| 2.26B | 2.28B | 2.25B | 2.26B | 2.76B | 1.57B | EBIT |
| 306.27M | 310.00M | 246.00M | 478.00M | 870.00M | -101.00M | EBITDA |
| 494.43M | 565.00M | 530.00M | 751.00M | 1.17B | 226.00M | Net Income Common Stockholders |
| 167.76M | 165.00M | 109.00M | 348.00M | 646.00M | -72.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 138.00M | 227.00M | 270.00M | 427.00M | 490.00M | 335.00M | Total Assets |
| 4.58B | 4.53B | 4.60B | 4.71B | 4.34B | 4.23B | Total Debt |
| 2.82B | 2.70B | 2.70B | 2.79B | 2.64B | 2.07B | Net Debt |
| 2.69B | 2.47B | 2.43B | 2.36B | 2.15B | 1.74B | Total Liabilities |
| 3.91B | 3.87B | 4.16B | 4.31B | 4.09B | 3.34B | Stockholders Equity |
| 645.00M | 640.00M | 417.00M | 383.00M | 257.00M | 891.00M |
| Cash Flow | Free Cash Flow | ||||
| 209.00M | 247.00M | 133.00M | 273.00M | 682.00M | 547.00M | Operating Cash Flow |
| 391.00M | 425.00M | 389.00M | 437.00M | 851.00M | 674.00M | Investing Cash Flow |
| -157.00M | -153.00M | -254.00M | -500.00M | -169.00M | -123.00M | Financing Cash Flow |
| -199.00M | -315.00M | -291.00M | 3.00M | -527.00M | -465.00M |
Victoria's Secret Technical Analysis
Negative
18.40
Price Trends
19.91
Negative
22.54
Negative
28.05
Negative
Market Momentum
-0.57
Positive
41.30
Neutral
10.07
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VSCO, the sentiment is Negative. The current price of 18.4 is below the 20-day moving average (MA) of 20.67, below the 50-day MA of 19.91, and below the 200-day MA of 28.05, indicating a bearish trend. The MACD of -0.57 indicates Positive momentum. The RSI at 41.30 is Neutral, neither overbought nor oversold. The STOCH value of 10.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VSCO.
Victoria's Secret Risk Analysis
Victoria's Secret disclosed 42 risk factors in its most recent earnings report. Victoria's Secret reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Victoria's Secret Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.29B | 11.55 | 44.55% | 3.12% | -1.08% | -8.20% | |
67 Neutral | $592.99M | 14.29 | 2.61% | 10.53% | 9.02% | -93.19% | |
64 Neutral | $1.66B | 9.80 | 12.19% | 5.22% | -0.95% | -10.51% | |
62 Neutral | $6.76B | 11.07 | 2.80% | 6.34% | 2.68% | -24.87% | |
61 Neutral | $1.47B | 9.24 | 31.35% | ― | 1.45% | 59.09% | |
57 Neutral | $242.44M | ― | -29.52% | ― | 1.85% | -337.77% | |
56 Neutral | $2.29B | 194.63 | -12.85% | ― | -2.62% | 0.93% |
* Consumer Cyclical Sector Average
Performance Comparison
VSCO
Victoria's Secret
18.83
1.08
6.08%
AEO
American Eagle
9.75
-9.89
-50.36%
BKE
Buckle
45.29
11.23
32.97%
CTRN
Citi Trends
29.22
7.83
36.61%
FL
Foot Locker
23.97
-1.46
-5.74%
GES
Guess?
11.96
-6.75
-36.08%
Victoria's Secret Corporate Events
Business Operations and StrategyFinancial Disclosures
Victoria’s Secret Exceeds Q1 2025 Expectations
Positive
Jun 11, 2025
Victoria’s Secret & Co. reported its first quarter 2025 results, with sales and operating income exceeding expectations. The company maintained its full-year sales guidance despite a slight decrease in comparable sales. The first quarter saw net sales of $1.353 billion and an operating income of $20 million, with a net loss of $2 million. The company remains optimistic about its future, focusing on brand differentiation and customer engagement. For the second quarter, the company forecasts net sales between $1.380 billion and $1.410 billion, with adjusted operating income expected to range from $15 million to $35 million.
The most recent analyst rating on (VSCO) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Victoria’s Secret stock, see the VSCO Stock Forecast page.
Business Operations and StrategyFinancial Disclosures
Victoria’s Secret Faces IT Security Incident Impact
Negative
Jun 3, 2025
On May 24, 2025, Victoria’s Secret & Co. detected a security incident involving its IT systems, prompting the temporary shutdown of corporate systems and the e-commerce website. While the incident did not affect the company’s financial results for the first quarter of fiscal 2025, it delayed the earnings release and call webcast. The company expects its financial metrics for the first quarter to meet or exceed the high-end of guidance ranges, but ongoing restoration efforts and potential expenses from the incident could impact future financial results.
The most recent analyst rating on (VSCO) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Victoria’s Secret stock, see the VSCO Stock Forecast page.
Private Placements and FinancingBusiness Operations and Strategy
Victoria’s Secret Amends Credit Agreement for Flexibility
Positive
May 22, 2025
On May 21, 2025, Victoria’s Secret & Co. amended its Revolving Credit Agreement with JPMorgan Chase Bank and other lenders, extending the maturity date and adjusting terms to improve financial flexibility. The amendment includes a seasonal increase in inventory advance rates, reduced interest rates on borrowings, and changes to borrowing conditions, which could enhance the company’s operational efficiency and financial positioning.
The most recent analyst rating on (VSCO) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Victoria’s Secret stock, see the VSCO Stock Forecast page.
Business Operations and Strategy
Victoria’s Secret Adopts Shareholder Rights Plan Amidst Market Dislocation
Neutral
May 20, 2025
On May 19, 2025, Victoria’s Secret & Co. announced the adoption of a limited-duration shareholder rights plan in response to BBRC International Pte Limited’s substantial accumulation of the company’s stock. The plan, effective immediately and expiring in one year, aims to protect the long-term interests of all shareholders by preventing any person or group from gaining control without paying an appropriate premium. The plan was adopted amidst market dislocation in the retail sector and is not intended to deter fair offers but to ensure shareholders receive equal treatment in any takeover scenario.
The most recent analyst rating on (VSCO) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Victoria’s Secret stock, see the VSCO Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.