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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.'s recent performance was positively driven by its stronger-than-expected Q3 results, which included a 9% sales growth to $1.472 billion, surpassing Wall Street estimates. The company's upgraded guidance for the full year also contributed to the positive momentum. Institutional investors, such as Barington Capital Group L.P., which lifted its holdings by 255.1%, and Campbell & CO Investment Adviser LLC, which invested $311,000 in the company, have shown confidence in Victoria's Secret. Additionally, UBS upgraded the stock from neutral to buy, citing a potential upside of 33%.

1.c. Company Highlights

2. Victoria's Secret & Co. Delivers Strong Q3 Results, Raises Full-Year Outlook

Victoria's Secret & Co. reported a standout third quarter with net sales of $1.47 billion, a 9% increase from the previous year, and adjusted gross margin expansion of 170 basis points. Earnings growth was 45%, driven by growth across Victoria's Secret, PINK, and Beauty. The actual EPS came out at -$0.27, beating estimates of -$0.6. The company's Intimates business returned to growth, up mid-single digits, gaining over 1% share in the U.S. Intimates market.

Publication Date: Dec -07

📋 Highlights
  • Q3 Net Sales Surge: Reached $1.47 billion, a 9% increase YoY, with comparable sales growth of 8%.
  • Gross Margin Expansion: Adjusted gross margin expanded 170 basis points to 36.5%, driven by lower discounting and cost leverage.
  • Intimates Market Share Gains: U.S. Intimates business grew mid-single digits, capturing over 1% additional market share.
  • Fashion Show Impact: Generated 61 million streaming views (+60% YoY) and 9 million new social followers.
  • Raised Full-Year Outlook: Projected net sales of $6.45–6.48 billion and adjusted operating income of $350–375 million.

Segment Performance

The International business grew at an accelerated pace, with retail sales up over 30% in China. The Victoria's Secret Fashion Show drove significant business impact, with streaming views reaching 61 million, up 60% from the previous year, and nearly 9 million new social followers. The strong results reflect growth across all businesses, including Victoria's Secret, PINK, and Beauty.

Margin Expansion and Outlook

The third-quarter adjusted gross margin rate was 36.5%, 170 basis points above last year, driven by leverage on buying and occupancy expenses, strength in regular price selling, and lower discounting. The company expects a net tariff impact of approximately $90 million in fiscal year 2025 and plans for a 200 basis point increase in gross margin, excluding gift card breakage and tariffs.

Valuation and Growth Prospects

With a P/S Ratio of 0.61, the stock appears to be reasonably valued. Analysts estimate next year's revenue growth at 3.9%. The company's ROE is 26.07%, indicating strong profitability. The EV/EBITDA ratio is 13.67, suggesting a moderate valuation. The company is well-positioned to deliver a strong holiday season and a solid finish to fiscal 2025, driven by initiatives in its path to potential strategy, including product innovation, brand strength, and customer experience.

Growth Initiatives

The company is focused on driving growth across all categories, including apparel, panties, and bras. AURs are increasing, driven by a shift to full-price selling and reduced promotions. The company expects this momentum to continue into next year. The beauty business has been strong, with a two-year stack, and is an area of focus for growth.

Operational Efficiency

The company is continuing to optimize its Store of the Future concept, including better assortment and optimization of pink and beauty products. The apparel mix is now above 40% of the pink business, with a goal of 50-60% over time. Lead time on the apparel side has improved, and there are opportunities to expedite it further.

3. NewsRoom

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Victoria's Secret: The Brand Is Regaining Momentum

Dec -07

Source: seekingalpha.com

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Victoria's Secret: The Reasons Why The Post-Earnings Rally Is Not Justified

Dec -07

Source: seekingalpha.com

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Dow Jones Today: Stocks Tick Higher After Key Inflation Data; Netflix To Buy Warner Bros. in $83B Deal

Dec -05

Source: investopedia.com

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Victoria's Secret stock soars after runway ‘angels' lend divine sales boost

Dec -05

Source: nypost.com

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Victoria's Secret & Co. (VSCO) Q3 2026 Earnings Call Transcript

Dec -05

Source: seekingalpha.com

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Victoria's Secret: Round Trip For The Stock, Back On Track

Dec -05

Source: seekingalpha.com

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Why Victoria's Secret Stock Is Soaring Friday

Dec -05

Source: investopedia.com

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Why Victoria's Secret Stock Roared Today

Dec -05

Source: fool.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

Stock-Card
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

1-Year Total Return ->

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Duluth Holdings

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

1-Year Total Return ->

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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

1-Year Total Return ->

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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

53.09$

Current Price

53.09$

Potential

-0.00%

Expected Cash-Flows