VictoriaS Secret 2026 Q3 Earnings Beats Expectations with 43.6% Net Loss Reduction

Victoria's Secret (VSCO) reported fiscal 2026 Q3 earnings on Dec 5, 2025, exceeding expectations with a 9.3% revenue increase to $1.47 billion and a 43.6% reduction in net losses to $31 million. The company raised full-year guidance to $6.45–6.48 billion in sales and $2.40–2.65 in adjusted EPS, reflecting strong international growth and strategic cost management.

Revenue

Total revenue surged 9.3% year-over-year to $1.47 billion, driven by robust international performance and disciplined pricing. North American sales rose 5.4% to $778 million, while international markets saw a 34% year-over-year increase to $264.8 million, fueled by digital expansion and brand initiatives. Direct-to-consumer revenue, including online and store sales, grew 4.3% to $428.5 million, underscoring the shift toward customer-centric strategies.

Earnings/Net Income

The company narrowed its net loss to $31 million ($0.46 per share) in 2026 Q3, a 43.6% improvement from the $55 million ($0.71 per share) loss in 2025 Q3. Adjusted gross margin expanded by 170 basis points to 36.5%, reflecting reduced promotional activity and higher regular-price selling. Despite ongoing losses, the company’s strategic focus on cost control and operational leverage is narrowing deficits effectively.

Price Action

Post-earnings, Victoria’s Secret shares surged 18.68% during the most recent full trading week and 38.68% month-to-date, reflecting investor optimism. The stock edged up 0.99% in the latest trading day, aligning with broader market confidence in the company’s turnaround strategy.

CEO Commentary

CEO Hillary Super highlighted the “multiplier effect” of strategic pillars, including the Fashion Show’s 61M streaming views and a 60% year-over-year engagement boost. The company’s Path to Potential strategy prioritized customer acquisition and product innovation, reversing declining active customer trends. Leadership emphasized momentum into Q4 and long-term shareholder returns through brand differentiation.

Guidance

CFO Scott Sekella raised FY2026 guidance to $6.45–6.48 billion in sales and $2.40–2.65 in adjusted EPS, up from prior estimates of $6.33–6.41 billion and $1.80–2.20. Q4 2025 guidance includes sales of $2.17–2.2 billion and EPS of $2.20–2.45. The company plans $200 million in CAPEX for store and tech investments, targeting 37–38% gross margins in Q4.

Post-Earnings Price Action Review

Victoria’s Secret’s stock price demonstrated significant post-earnings momentum, surging 17.88% in pre-market trading following the Q3 2025 report. The shares closed at $48.50, reflecting a 13.77% jump in pre-market sessions. This surge aligns with the company’s 52-week high of $50.22 and contrasts with a 13.43% annual decline, underscoring the positive reception of its improved financial performance and raised guidance. Analysts attributed the rally to the company’s strategic focus on cost management, international growth, and reduced promotional activity, which bolstered gross margins and investor confidence.

Additional News

Recent developments include UBS maintaining a Buy rating with a $46 price target, citing 3% CAGR in sales growth from apparel, beauty, and international segments. Goldman Sachs upgraded the stock to Neutral, highlighting enhanced brand momentum post-new leadership. BBRC International, a 12.9% stakeholder, demanded board changes, including replacing Chair Donna James with founder Brett Blundy. These corporate governance shifts reflect ongoing strategic realignment.