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1. Company Snapshot

1.a. Company Description

Victoria'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.

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1.b. Last Insights on VSCO

Victoria's Secret & Co. has seen increased investor confidence, with Oppenheimer Asset Management Inc. lifting its stake by 44.6% and Campbell & CO Investment Adviser LLC investing $311,000 in the company. Analysts at Jeffries raised their target price by 15% to $35 per share, citing strong leadership momentum, innovation, and a healthy full-price mix. Additionally, UBS upgraded the stock from neutral to buy, with a 12-month price target of $46 per share, implying a potential upside of 33%. The company's strong momentum under new CEO Hillary Super has resulted in total shareholder returns of 89%.

1.c. Company Highlights

2. Victoria's Secret & Co. Exceeds Expectations with Strong Q2 2025 Results

Victoria's Secret & Co. reported a 3% year-over-year net sales growth to $1.46 billion in the second quarter of 2025, driven by strong performance in both PINK and Victoria's Secret intimates. Adjusted operating income reached $55 million, exceeding guidance by $20 million. The company's adjusted net income per diluted share was $0.33, significantly beating estimates of $0.13. Gross margins improved to 35.6%, 20 basis points higher than last year, driven by a thoughtful discounting cadence and increased regular-priced selling.

Publication Date: Sep -02

📋 Highlights
  • Adjusted Operating Income Surpass Guidance:: Achieved $55M adjusted operating income, exceeding high-end guidance by $20M.
  • Net Sales Growth:: Year-over-year net sales rose 3% to $1.46B, driven by core intimates and PINK performance.
  • Gross Margin Expansion:: Increased to 35.6%, up 20 basis points year-over-year, due to disciplined discounting and higher regular-priced sales.
  • PINK Revival Momentum:: PINK recorded low single-digit growth, with double-digit apparel sales and new customer acquisition success.
  • Tariff Impact Mitigation:: Fiscal 2025 tariff costs now projected at $100M, with $70M mitigation via sourcing diversification and cost optimization.

Operational Highlights

The company's success was driven by several factors, including a focus on bras, successful initiatives like the Body by Victoria launch, and a digital- and social-first approach for PINK. Victoria's Secret saw a sequential improvement in bra sales and gained market share in total bras and traditional bras. PINK experienced low single-digit growth, led by double-digit apparel increases and a focus on new customer acquisition.

Segment Performance

The company saw strong performance in its core intimates business, with panties being a particular standout. Beauty, PINK apparel, and sport also continued to accelerate in Q2. This success was driven by improved full-priced sales, particularly in panties, and a strategic focus on newness and content, which was amplified by the fashion show in Q4 2024.

Valuation and Future Outlook

With a P/E Ratio of 10.49 and an ROE of 30.7%, the company's valuation appears reasonable considering its strong profitability. Victoria's Secret raised its full-year 2025 net sales forecast to $6.33 billion to $6.41 billion due to strong momentum, particularly in July. Analysts estimate next year's revenue growth at 2.1%. The company is investing in innovation across both Victoria's Secret and PINK, focusing on fashion and technology advancements to cater to evolving customer needs.

Tariff Impact and Mitigation

The company is mitigating the $100 million tariff impact estimated for fiscal 2025 through cost optimization, sourcing diversification, and strategic pricing adjustments. Efforts are underway to increase mitigation in fiscal 2026 through sourcing from different countries and reducing reliance on air freight. The company is also testing higher price points for panties while remaining mindful of the need to retain traffic and drive basket size.

3. NewsRoom

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Victoria’s Secret & Co. $VSCO Shares Purchased by Barington Capital Group L.P.

Dec -01

Source: defenseworld.net

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Commonwealth of Pennsylvania Public School Empls Retrmt SYS Raises Position in Victoria’s Secret & Co. $VSCO

Nov -27

Source: defenseworld.net

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Campbell & CO Investment Adviser LLC Invests $311,000 in Victoria’s Secret & Co. $VSCO

Nov -18

Source: defenseworld.net

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Victoria's Secret & Co. Invites You to Listen to the Third Quarter 2025 Earnings Call Webcast

Nov -14

Source: globenewswire.com

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Victoria's Secret & Co. Board Comments on BBRC Letter

Nov -04

Source: globenewswire.com

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Victoria's Secret investor urges ouster of ‘over-tenured' board chair with ‘stale perspective'

Nov -04

Source: nypost.com

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BBRC Releases Letter to Victoria's Secret's Board of Directors

Nov -04

Source: businesswire.com

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Major Investor in Victoria's Secret Seeks Board Shake-Up

Nov -04

Source: wsj.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.20%)

6. Segments

Women's Intimate and Other Apparel and Beauty Products

Expected Growth: 5.2%

Victoria's Secret & Co.'s 5.2% growth in Women's Intimate and Other Apparel and Beauty Products is driven by increasing demand for comfort-focused lingerie, expansion of e-commerce channels, and successful marketing campaigns targeting younger demographics. Additionally, the brand's efforts to promote body positivity and inclusivity resonate with consumers, contributing to the segment's growth.

7. Detailed Products

Lingerie

Victoria's Secret offers a wide range of lingerie products, including bras, panties, corsets, and sleepwear.

Sleepwear

Victoria's Secret offers a variety of sleepwear products, including pajamas, loungewear, and robes.

Beauty and Accessories

Victoria's Secret offers a range of beauty and accessory products, including fragrances, body care, and fashion accessories.

Swimwear

Victoria's Secret offers a variety of swimwear products, including bikinis, tankinis, and board shorts.

Pink Nation

Victoria's Secret's Pink Nation brand offers a range of casual, comfortable clothing and accessories, including hoodies, sweatpants, and graphic tees.

8. Victoria's Secret & Co.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Victoria's Secret & Co. faces moderate threat from substitutes, as customers have limited alternatives for lingerie and intimate apparel. However, the rise of online retailers and fast-fashion brands offering affordable and trendy options poses a moderate threat.

Bargaining Power Of Customers

Victoria's Secret & Co. customers have high bargaining power due to the availability of substitutes and the ease of switching to competitors. Additionally, the rise of online reviews and social media has given customers a stronger voice, allowing them to influence brand reputation and demand.

Bargaining Power Of Suppliers

Victoria's Secret & Co. has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's large scale and global presence also give it negotiating power in sourcing materials and services.

Threat Of New Entrants

The threat of new entrants is low for Victoria's Secret & Co. due to the high barriers to entry in the lingerie and intimate apparel market. New entrants would need significant investment in marketing, distribution, and supply chain management to compete with established brands.

Intensity Of Rivalry

The lingerie and intimate apparel market is highly competitive, with established brands like Victoria's Secret & Co. facing intense rivalry from other players. The rise of online retailers and fast-fashion brands has increased competition, making it essential for Victoria's Secret & Co. to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 76.94%
Debt Cost 4.64%
Equity Weight 23.06%
Equity Cost 14.74%
WACC 6.97%
Leverage 333.57%

11. Quality Control: Victoria's Secret & Co. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Genesco

A-Score: 3.5/10

Value: 7.2

Growth: 3.0

Quality: 2.7

Yield: 0.0

Momentum: 6.0

Volatility: 2.3

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Victoria's Secret

A-Score: 3.5/10

Value: 5.2

Growth: 3.3

Quality: 3.8

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

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A-Score: 3.5/10

Value: 9.8

Growth: 1.4

Quality: 4.4

Yield: 0.0

Momentum: 4.0

Volatility: 1.3

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Torrid

A-Score: 3.0/10

Value: 8.0

Growth: 4.4

Quality: 3.9

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

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Zumiez

A-Score: 2.9/10

Value: 4.4

Growth: 2.1

Quality: 3.9

Yield: 0.0

Momentum: 4.0

Volatility: 3.0

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The Children's Place

A-Score: 2.7/10

Value: 9.8

Growth: 1.0

Quality: 4.5

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

41.57$

Current Price

41.57$

Potential

-0.00%

Expected Cash-Flows