Victoria’s Secret & Co (NYSE:VSCO) posted a strong third-quarter performance and is gaining momentum heading into the holiday season, driven by higher full-price sales and improving customer demand across its brands and channels.
Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating for Victoria’s Secret and raised the price forecast from $45 to $50.
Telsey cited continued momentum through the third quarter and into the holiday season.
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The analyst said Victoria’s Secret beat third-quarter expectations on an 8% same-store sales gain, with strength across Victoria’s Secret and PINK, in North America and internationally, and in both stores and e-commerce.
She credited the topline beat to a broader, growing customer file and higher regular-price selling that reduced promotional drag, which also pushed gross margin above consensus.
Black Friday Trends
Strong Black Friday store traffic, driven by a site-wide 40% discount, reinforced management’s confidence and supported an upward revision to full-year guidance, Telsey noted.
The analyst raised her fiscal 2025 revenue forecast to $6.484 billion (up from $6.395 billion prior) and lifted fiscal 2025 EPS to $2.65 (from $2.10). She now models fiscal 2026 EPS of $2.80.
Telsey highlighted Victoria’s Secret’s “Path to Potential” strategy as the engine behind results.
The four pillars, reasserting bra leadership, refocusing PINK, expanding beauty, and refining brand projection and go-to-market, show tangible progress, the analyst noted.
Product Innovation
North American bra sales grew mid-single digits in the third quarter; new products like the Body By Victoria FlexFactor and Very Sexy franchises performed well, she noted.
PINK returned to growth, with double-digit revenue gains driven by apparel and a rebound in intimates after the October Fashion Show and successful LoveShackFancy collaborations that pulled in new and reactivated customers at full price, Telsey noted.
The analyst called beauty an under-penetrated growth opportunity, near $1 billion in North America, with only ~40% of Victoria’s Secret customers buying beauty today.
Management plans to scale the category and leaned into giftable SKUs for the holidays, she noted.
Fourth-Quarter Outlook
Telsey noted fourth-quarter guidance centered on $2.17 billion–$2.20 billion revenue, reflecting 4%–6% growth.
The gross margin guide of 37.0%-38.0% includes $65 million of net tariff impact, partially offset by a disciplined promotional strategy and buying and occupancy cost leverage, the analyst said.
Inventory will exit fourth-quarter up mid-teens, driven by growth to support the business, the impact of tariffs, and shifting more towards ocean freight, she said.
Telsey concluded that disciplined merchandising, stronger storytelling, and a growing customer base position Victoria’s Secret to regain market share and margins.
VSCO Price Action: Victoria’s Secret shares were up 1.29% at $49.68 at the time of publication on Monday. The stock is trading near its 52-week high of $50.21, according to Benzinga Pro data.
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