Victoria's Secret & Co.'s Strategic Reinvention: Assessing Long-Term Growth Amidst Financial Recovery

Victoria's Secret & Co. has navigated a complex path of financial recovery and strategic reinvention in recent years, positioning itself as a case study in brand resilience. After a challenging 2023 marked by a 6% year-over-year sales decline in the U.S. market, the company has demonstrated a clear pivot toward international expansion, digital innovation, and operational efficiency. For investors, the question remains: Can these efforts translate into sustainable long-term growth, or are they merely short-term fixes for a brand struggling to adapt to shifting consumer preferences?

Financial Recovery: A Tale of Two Markets

The company's financial performance in 2024 and 2025 underscores a bifurcated recovery. While domestic sales have shown volatility—such as a 1% decline in Q1 2025 compared to the same period in 2024—the international business has become a critical growth engine. According to a report by the company, international sales surged by over 25% in 2023, driven by strategic investments in markets like China and Brazil Victoria’s Secret & Co. Presents Strategic Plan Focused on Accelerating the Core and Driving Growth Initiatives to Deliver the Potential of the Victoria’s Secret and PINK Brands^[1]. This momentum carried into 2024, with Q4 comparable sales rising 5% globally, fueled by the Victoria's Secret and PINK brands as well as the Beauty division Victoria's Secret & Co. Reports Encouraging Q4 Results^[2].

The acquisition of Adore Me, a direct-to-consumer intimates brand with a strong digital footprint, has further amplified this international growth. As stated by the company, Adore Me's tech-enabled strategies—such as AI-driven size recommendations and personalized marketing—have not only boosted online sales but also provided Victoria's Secret with a blueprint for modernizing its own digital platforms Victoria’s Secret & Co. Presents Strategic Plan Focused on Accelerating the Core and Driving Growth Initiatives to Deliver the Potential of the Victoria’s Secret and PINK Brands^[1]. By Q2 2025, the company's net sales had grown 3% year-over-year to $1.459 billion, with operating income reaching $41 million, signaling a return to profitability Victoria’s Secret & Co. Reports Second Quarter 2025 Results^[3].

Strategic Initiatives: Reinforcing the Core and Igniting New Frontiers

Victoria's Secret's three-pronged strategic framework—Strengthen Our Core, Ignite Growth, and Transform the Foundation—has been central to its recovery. The “Strengthen Our Core” pillar focuses on optimizing inventory management and supply chain efficiency, which contributed to disciplined cost controls in 2024. For instance, the company's net income for fiscal 2024 rose to $165 million, up from $109 million in 2023, despite a 1% overall sales increase Victoria's Secret & Co. Reports Encouraging Q4 Results^[2].

The “Ignite Growth” strategy, meanwhile, has prioritized digital transformation and brand diversification. A multi-tender loyalty program launched in 2024 has enhanced customer retention, while product innovations—such as the expansion of the Victoria's Secret Beauty line—have attracted new demographics. The company's recent $250 million share repurchase authorization also underscores its commitment to shareholder value, a move that could bolster investor confidence amid mixed quarterly results Victoria's Secret & Co. Reports Encouraging Q4 Results^[2].

However, the most transformative element of the strategy is the integration of Adore Me. Data from the company indicates that Adore Me's digital-first approach has already generated $100 million in incremental revenue since the acquisition, with cross-selling opportunities between the two brands expected to scale in 2025 Victoria’s Secret & Co. Presents Strategic Plan Focused on Accelerating the Core and Driving Growth Initiatives to Deliver the Potential of the Victoria’s Secret and PINK Brands^[1]. This synergy highlights Victoria's Secret's potential to leverage technology not just for sales, but for redefining customer engagement in an era where e-commerce now accounts for over 30% of total revenue Victoria’s Secret & Co. Reports Second Quarter 2025 Results^[3].

Risks and Opportunities in the Road Ahead

Despite these positives, challenges persist. The Q1 2025 sales dip, though modest, raises questions about the sustainability of the company's domestic recovery. Analysts at Bloomberg note that macroeconomic headwinds, including inflation and shifting consumer spending patterns, could pressure margins in the near term Victoria’s Secret & Co. Reports Second Quarter 2025 Results^[3]. Additionally, the company's reliance on international growth exposes it to currency fluctuations and geopolitical risks, particularly in key markets like China.

Yet, Victoria's Secret's raised 2025 guidance—from an initial $6.2–$6.3 billion to a new $6.33–$6.41 billion—suggests confidence in its ability to mitigate these risks. The company's focus on inventory discipline and supply chain modernization, combined with Adore Me's digital expertise, positions it to capitalize on the growing demand for personalized, tech-driven shopping experiences.

Conclusion: A Brand in Transition

Victoria's Secret & Co. is no longer the same company that faced a 2023 sales slump. Through strategic acquisitions, digital innovation, and a renewed focus on international markets, it has laid the groundwork for a more agile and customer-centric business model. While the path to long-term growth is not without obstacles, the company's recent financial performance and strategic clarity indicate that it is on the right trajectory. For investors, the key will be monitoring how effectively these initiatives translate into consistent profitability and brand relevance in an increasingly competitive retail landscape.