Victorias Secret 2026 Q1 Earnings Narrowed Losses with Net Income Up 200%

Victoria's Secret (VSCO) reported its fiscal 2026 Q1 earnings on June 12, 2025. The company reported a slight decrease in overall revenue but achieved a positive swing in net income, marking a significant improvement from the previous year. Despite a challenging macroeconomic environment, the company maintained its full-year guidance, suggesting confidence in its strategic initiatives. The results exceeded some expectations, particularly in terms of net income, which showed a notable improvement. The guidance was reaffirmed, maintaining a steady outlook for fiscal 2025.

Revenue

The total revenue of Victoria's Secret declined by 0.4% to $1.35 billion in 2026 Q1, compared to $1.36 billion in 2025 Q1.

Earnings/Net Income

Victoria's Secret reduced its losses to $0.02 per share in 2026 Q1 from a loss of $0.05 per share in 2025 Q1, marking a 60.0% improvement. Additionally, the company achieved a net income of $3 million in 2026 Q1, a remarkable 200.0% positive swing from the net loss of $-3 million in 2025 Q1. This EPS turnaround reflects a positive financial trajectory.

Price Action

The stock price of Victoria's Secret dropped 3.65% during the latest trading day, declined 5.12% over the most recent full trading week, and has decreased by 9.63% month-to-date.

Post-Earnings Price Action Review

The strategy of investing in VSCO following revenue misses and holding for 30 days proved ineffective, yielding a return of -57.63%, significantly underperforming the benchmark return of 32.48%. This approach resulted in an excess return of -90.11% and a compound annual growth rate (CAGR) of -21.04%, highlighting its failure to align with market gains. The strategy also faced a high maximum drawdown of -79.25%, indicating considerable volatility, and a Sharpe ratio of -0.34, suggesting that the level of risk assumed did not translate into satisfactory returns. This underperformance underscores the challenges in leveraging revenue expectations for investment decisions in this environment.

CEO Commentary

Hillary Super, CEO & Director, expressed optimism about Victoria's Secret's performance, highlighting a "strong note" with solid first-quarter results that surpassed guidance. She noted progress in strategic priorities, including a recommitment to PINK and a focus on innovation and customer service. Despite challenges from a "softening macroeconomic environment," agile marketing adjustments and product launches contributed to positive outcomes. Super emphasized the importance of emotional storytelling in brand strategy and the success of new collections, particularly in PINK and Beauty. She acknowledged the need for ongoing improvement in the intimates sector while expressing pride in her team's resilience and adaptability.

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, reflecting a significant gross tariff impact of approximately $120 million. The company anticipates an adjusted net income per diluted share in the range of $1.80 to $2.20 and expects capital expenditures of around $220 million, focusing on store capital and technology investments.

Additional News

Victoria's Secret & Co. recently experienced a security incident involving its IT systems, leading to a temporary shutdown of corporate systems and the e-commerce website. The website was restored, and most store functions have resumed. The company is assessing the incident's impact, overseen by the Audit Committee. In other news, Victoria's Secret announced key leadership appointments to drive strategic growth and implemented a limited-duration shareholder rights plan in response to substantial stock accumulation by BBRC, aiming to protect long-term shareholder value. These developments underscore the company's proactive approach in maintaining operational integrity and strategic direction.