Victorias Secret 2026 Q1 Earnings Net Income Swings Positive by 211.7%

Victoria’s Secret (VSCO) reported its fiscal 2026 Q1 earnings on Jun 11th, 2025. The company’s results showed a remarkable turnaround in net income, swinging from a loss of $2.48 million in 2025 Q1 to a positive $2.77 million in 2026 Q1, representing a 211.7% improvement. Despite a slight revenue decline of 0.5%, Victoria’s Secret reaffirmed its full-year guidance, maintaining confidence in its strategic priorities. The company forecasts adjusted operating income for 2025 between $270 million and $320 million, aligning with previous expectations despite challenges.

Revenue

Victoria’s Secret experienced a slight dip in total revenue, reaching $1.35 billion in 2026 Q1, a modest decline from $1.36 billion in the same quarter last year.

Earnings/Net Income

Victoria’s Secret narrowed its losses significantly in 2026 Q1, reporting a loss of $0.02 per share compared to $0.05 in 2025 Q1. The company achieved an impressive turnaround with a net income of $2.77 million, marking a substantial 211.7% improvement from the previous year. The EPS results indicate positive momentum for the company.

Post-Earnings Price Action Review

The strategy of purchasing VSCO shares following a revenue miss and holding for 30 days resulted in poor performance. A backtest revealed a substantial loss of -52.36%, highlighting high risk with no returns. The Sharpe Ratio of -0.29 and a maximum drawdown of -79.25% indicate the strategy's ineffectiveness, underperforming the benchmark by 84.62%. This underscores the strategy's volatility and inability to capitalize on potential market recovery. Investors are advised to exercise caution, as historical data suggests significant losses rather than gains, emphasizing the importance of considering alternative strategies with more favorable risk-reward profiles. The analysis points to the need for a reassessment of investment tactics in response to revenue fluctuations, taking into account broader market conditions and company-specific factors.

CEO Commentary

Hillary Super, CEO & Director, expressed optimism about Victoria's Secret's performance, stating, "We're pleased to kick off the summer on a strong note with solid first quarter results." She highlighted the company's agility in responding to market challenges, noting, "Our teams responded with agility, making impactful adjustments to assortment and marketing." Super emphasized strategic priorities, including a recommitment to PINK and innovation in product offerings, and acknowledged the ongoing need for brand modernization. She concluded with confidence in the brand's direction, stating, "I'm pleased with our progress and proud of the way we achieved our results."

Guidance

Victoria's Secret maintains its forecasted net sales range for fiscal year 2025 at $6.2 billion to $6.3 billion. The adjusted operating income is expected to be between $270 million and $320 million. The company anticipates adjusted net income per diluted share in the range of $1.80 to $2.20. Capital expenditures are estimated at approximately $220 million, with an expected adjusted free cash flow of $150 million to $200 million for the fiscal year.

Additional News

Recently, Victoria's Secret faced a significant cybersecurity incident that led to the temporary shutdown of its corporate systems and e-commerce website. Despite the breach, the company managed to deliver strong Q1 results, surpassing expectations. The incident, detected on May 24th, 2025, prompted Victoria's Secret to postpone its Q1 earnings release and call webcast. The company continues to restore full access to its systems and assess the financial impacts, which may affect future results, particularly for Q2 2025. Additionally, Victoria's Secret adopted a Limited-Duration Shareholder Rights Plan to prevent an activist investor from amassing a controlling stake, showcasing strategic moves in corporate governance to maintain shareholder interests and company stability amidst external pressures.