Victoria’s Secret (VSCO) Stock: Why Shares Jumped After Latest Earnings Report

TLDR

• Victoria’s Secret sales jumped 9% to $1.5 billion in Q3, nearly double Wall Street’s 4.6% growth forecast
• Net losses narrowed to $37 million from $56 million year-over-year, with adjusted earnings beating estimates by 32 cents
• The October runway show generated 60 million views and 50 billion impressions, boosting both Victoria’s Secret and Pink brands
• Full-year revenue guidance raised to $6.45-$6.48 billion, up from previous $6.33-$6.41 billion forecast
• Pink brand showed strongest growth with low double-digit increases, with bigger intimates opportunity than initially expected

Victoria’s Secret delivered Q3 results that crushed Wall Street expectations. Revenue climbed 9% to $1.5 billion for the quarter ended November 1.

Analysts had predicted growth of just 4.6%. The beat nearly doubled expectations.

CEO Hillary Super credited the performance to her team’s focus on product, shopping experience, and creative marketing. Super joined Victoria’s Secret from Savage x Fenty in September 2024.

“It’s never one of those things,” Super said. “It’s always all those and I think it’s the power of all of those things together.”

The company gained market share across channels and regions. Customers reactivated, Super noted.

Victoria’s Secret & Co., VSCO

New market share gains came largely from off-price channels. This suggests the brand can attract shoppers beyond just value seekers with better marketing and product focus.

Bottom Line Shows Progress

Net losses narrowed to $37 million from $56 million a year earlier. That’s a $19 million improvement.

Adjusted earnings per share came in at 27 cents. Analysts had forecast a loss of 59 cents.

The 86-cent beat exceeded expectations by a wide margin. Adjusted operating income reached breakeven.

The company had forecast a loss of $35 million to $55 million. Last year’s Q3 posted a $28 million operating loss.

Gross margin expanded 170 basis points. The improvement came from reduced promotional activity and higher regular-priced selling.

Both the Victoria’s Secret namesake brand and Pink performed well. The main brand grew mid-single digits while Pink jumped low double digits.

Runway Show Delivers Results

The October livestreamed runway show proved to be a catalyst. The event generated over 60 million views and 50 billion impressions.

Victoria’s Secret returned to the runway in 2024 after several years away. The team learned from that first show and made improvements for 2025.

“The focus with Victoria’s Secret is really sharpening what sexy is today for us and what that feels like and the fashion show’s really the beginning of that journey,” Super said.

Pink emerged as the quarter’s star performer. Super said the brand has a bigger opportunity in intimates than she initially thought.

Adore Me, acquired for $400 million in early 2023, continues to develop. New management was recently installed at the brand.

The company raised its full-year revenue outlook to $6.45 billion to $6.48 billion. Previous guidance stood at $6.33 billion to $6.41 billion.

Analyst estimates were $6.39 billion. Adjusted earnings per share guidance increased to $2.40 to $2.65.

That’s up from prior guidance of $1.80 to $2.20. Analysts forecast $2.12.

The outlook includes a $90 million hit from new tariffs this year. CFO Scott Sekella said the company remains focused on managing costs while investing in product innovation, brand strength, and customer experience.

Super expressed confidence in the turnaround strategy. The team is seeing measurable results across every initiative.

Comparable sales increased 8% during the quarter. Revenue for Q4 is projected between $2.17 billion and $2.2 billion, with adjusted earnings per share of $2.20 to $2.45.

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Source: https://blockonomi.com/victorias-secret-vsco-stock-why-shares-jumped-after-latest-earnings-report/