Published: December 6, 2025
Victoria’s Secret & Co. (NYSE: VSCO) just delivered one of its strongest trading days since becoming an independent company. After a decisive earnings beat and a meaningful guidance hike, the stock ripped higher and is now trading near its 52‑week high, forcing investors to reassess the lingerie retailer’s turnaround story and valuation.
Key takeaways
- VSCO stock jumped about 18% on December 5, 2025, closing at $49.05 after Q3 fiscal 2025 results beat Wall Street estimates and guidance was raised across the board. [1]
- Q3 net sales rose 9% year over year to $1.472 billion, with comparable sales up 8% and gross margins expanding by 170 basis points as the company pulled back on discounting. [2]
- The company still reported a loss, but an adjusted loss of $0.27 per share was far better than the roughly $0.60 loss analysts expected, producing a ~55% earnings surprise. [3]
- Full‑year 2025 guidance was raised: Victoria’s Secret now forecasts net sales of $6.45–$6.48 billion and adjusted EPS of $2.40–$2.65, even after an estimated $90 million tariff headwind. [4]
- Valuation is controversial: some models suggest the stock is overvalued after the rally, while others see it still below intrinsic value. Analyst price targets cluster mostly in the high‑20s to mid‑40s, below or around the current price. [5]
- An activist campaign from major shareholder BBRC and an ongoing boardroom tug‑of‑war add a governance catalyst on top of the operational turnaround story. [6]
VSCO stock: biggest move in years
At the close on Friday, December 5, Victoria’s Secret shares finished at $49.05, up 17.99% on the day, with after‑hours trading edging slightly lower to $48.80. [7]
Key trading metrics as of that close:
- Market cap: about $3.9 billion
- 52‑week range:$13.76 – $50.22 (the stock is now essentially at its high)
- Trailing 12‑month revenue:$6.39 billion
- Trailing EPS (GAAP):$2.09, implying a trailing P/E ratio around 23.5x
- Forward P/E: roughly 20.8x, based on consensus estimates prior to the guidance hike
- Beta:2.32, highlighting elevated volatility versus the broader market [8]
Finviz notes that VSCO has experienced 44 daily moves larger than 5% over the last year, illustrating just how jumpy the stock has been, and estimates the stock is up roughly 17% year‑to‑date heading into this post‑earnings surge. [9]
This jump took place against a supportive macro backdrop. U.S. equities rose modestly on December 5 as the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, showed headline inflation at 2.9% year‑on‑year and core inflation at 2.8%, reinforcing expectations for an interest‑rate cut at the Federal Reserve’s meeting next week. [10] A friendlier rate environment particularly helps rate‑sensitive consumer discretionary names like Victoria’s Secret.
Q3 2025: growth returns, losses narrow
Victoria’s Secret’s third quarter of fiscal 2025, ended November 1, 2025, marked a clear acceleration versus recent years.
Revenue and comparable sales
According to the company’s official press release:
- Net sales came in at $1.472 billion, up 9% from $1.347 billion in Q3 2024.
- Sales exceeded the prior guidance range of $1.39–$1.42 billion.
- Total comparable sales rose 8%, a strong result for a mature retailer. [11]
Finviz and Zacks both highlight that revenue beat consensus estimates by roughly 4–5%, with Zacks pegging the revenue surprise at 4.55%. [12]
Margins and earnings
The quality of those sales improved as well:
- Adjusted gross margin expanded by 170 basis points, driven largely by fewer promotions and more full‑price selling. [13]
- Operating loss shrank to $19 million, versus a $47 million loss a year earlier. [14]
- GAAP net loss was $37 million, or $0.46 per share, better than the $0.71 loss in Q3 2024. [15]
On an adjusted basis:
- Victoria’s Secret reported an adjusted net loss of $22 million, or $0.27 per share.
- Management had guided for an adjusted loss of $0.55–$0.75 per share.
- Zacks’ consensus ahead of the print was a $0.60 loss, implying roughly a 55% positive earnings surprise. [16]
The Motley Fool, citing similar consensus figures, notes that analysts had expected a loss of around $0.59 per share on $1.4 billion of sales, while the company delivered an adjusted loss of $0.27 on nearly $1.5 billion in revenue. [17]
In other words, Victoria’s Secret is still losing money in Q3 on a GAAP basis, but is losing much less than expected, and is demonstrating both top‑line growth and margin improvement.
Raised guidance: a much more optimistic 2025 outlook
The most market‑moving part of the release was not the quarter itself, but what management said about the future.
From the Q3 press release, Victoria’s Secret raised its full‑year fiscal 2025 outlook as follows: [18]
Full‑year 2025 (fiscal)
- Net sales: now expected at $6.45–$6.48 billion
- Prior guidance: $6.33–$6.41 billion
- Adjusted operating income:$350–$375 million
- Prior guidance: $270–$320 million
- Adjusted EPS:$2.40–$2.65
- Prior guidance: $1.80–$2.20
- Outlook includes an estimated $90 million tariff impact, reduced from a prior estimate of $100 million.
Q4 2025 (holiday quarter)
- Net sales:$2.17–$2.20 billion, vs. $2.106 billion in Q4 2024
- Adjusted operating income:$265–$290 million
- Adjusted EPS:$2.20–$2.45 [19]
Finviz notes that the new full‑year EPS midpoint of about $2.53 exceeds previous Wall Street consensus estimates, and that the new Q4 revenue outlook is also above expectations, which helps explain the sharp positive reaction in the stock. [20]
Using the midpoint of EPS guidance (≈$2.53) and the current share price around $49, the stock is trading at roughly high‑teens to ~20x forward earnings, depending on whether you use management’s forecast or pre‑earnings consensus numbers.
Why the market suddenly likes this turnaround
Victoria’s Secret has been working through a multi‑year repositioning of both its brand image and operating model, now framed internally as the “Path to Potential” strategy. Management emphasizes several pillars:
- Fewer promotions, more full‑price selling, which is already showing up in gross margin expansion. [21]
- Strength across all key banners — Victoria’s Secret, PINK and Beauty — and across channels (stores and digital) and geographies. [22]
- A focus on product innovation, “high‑emotion marketing” and a curated assortment, all designed to refresh brand relevance. [23]
In the Q3 release, CEO Hillary Super described the quarter as a “standout” that exceeded the high end of guidance, crediting broad‑based strength and disciplined execution, while CFO/COO Scott Sekella highlighted the combination of margin expansion and cost discipline that gave management confidence to raise the outlook into the key holiday period. [24]
Social‑media sentiment has turned sharply more positive as well. Quiver Quantitative’s tracking of X (formerly Twitter) posts notes an “explosion” in chatter around VSCO following the Q3 release, with users focusing on the 9% sales growth, 8% comp increase and raised full‑year guidance. Many posts frame the results as evidence of a successful turnaround under new leadership, aided by refreshed assortments, strong demand for the Victoria’s Secret and PINK brands, and high‑profile marketing events like the recent fashion show. [25]
Taken together, operational momentum, upgraded guidance, and visible brand buzz support the idea that Victoria’s Secret has moved from “just surviving” to returning to growth — at least for now.
Wall Street reaction: buy the story, question the price
The rally has not made the stock’s valuation story simple. Different data providers and analysts paint an uneven picture.
Consensus ratings and targets
According to StockAnalysis, which aggregates Wall Street coverage:
- Average analyst rating:“Buy” (12 analysts)
- Average 12‑month price target:$33.50, implying about 32% downside from the current ~$49 share price. [26]
Quiver Quantitative, using another dataset, reports: [27]
- 10 analysts have issued price targets in the last six months.
- Median target:$27.00.
- Recent targets include:
- $45 from Telsey Advisory Group (Dec. 2, 2025)
- $46 from UBS (Oct. 29, 2025)
- $32 from Goldman Sachs (Oct. 27, 2025)
- $28 from JPMorgan (Sept. 15, 2025)
- $27 from Morgan Stanley (Sept. 12, 2025)
- $17 from Wells Fargo (Underweight, Aug. 29, 2025)
- $26 from Jefferies (Buy, Aug. 29, 2025)
Separately, StocksToTrade reports that Barclays raised its price target from $27 to $47 and reiterated an Overweight rating ahead of earnings, signaling growing conviction that growth is re‑accelerating. [28]
So while ratings skew positive, many of the official targets sit below or only near the current price, reflecting the fact that the stock has outrun earlier expectations and analysts may need time to update their models post‑guidance.
Fundamental valuation debates
Simply Wall St captures the split in views quite clearly: [29]
- One widely viewed “most popular narrative” pegs fair value at about $31.20, roughly 33% below the pre‑earnings price of $41.57 at the time, based on consensus earnings and margin assumptions.
- That same narrative notes a consensus target of $22.70, with bulls at $27 and bears at $17, and labels the stock overvalued on that basis.
- However, Simply Wall St’s discounted cash flow (DCF) model draws a different conclusion, estimating fair value around $45.14, about 8% above that earlier price — implying that, from a cash‑flow perspective, VSCO was still slightly undervalued before the latest spike.
After Friday’s rally toward $49, those fair‑value gaps have compressed or flipped, depending on which model you prefer.
Quantitative and earnings‑revision angles
Zacks, which focuses heavily on earnings revisions, currently assigns Victoria’s Secret a Rank #3 (Hold), expecting performance roughly in line with the market in the near term. [30]
Before the guidance raise, Zacks’ consensus estimates looked like this: [31]
- Q4 EPS:$2.20 on $2.16 billion of revenue
- Full‑year EPS:$2.08 on $6.38 billion of revenue
Those EPS numbers sit below the company’s new guidance range of $2.40–$2.65, suggesting that analysts will likely need to revise estimates upward, which in turn could support the stock — assuming the share price doesn’t run too far ahead of those revisions.
The Motley Fool, in a more skeptical note published via Nasdaq, points out that even after the earnings beat, Victoria’s Secret still reported a net loss in Q3, and estimates that after subtracting roughly $90 million in tariff costs, the company may earn at least about $1.28 per share this year on a GAAP basis — implying a price‑to‑earnings ratio near the high‑30s at the current share price. The author concludes that VSCO looks expensive relative to its roughly 9% sales growth rate. [32]
The takeaway: Wall Street believes the business is improving, but is divided on whether today’s price already discounts the turnaround.
Hedge funds, institutions and sentiment flows
Quiver Quantitative’s data also sheds light on who’s trading around the story: [33]
- In the most recent quarter:
- 137 institutional investors added VSCO shares, while
- 192 reduced their positions.
- Notable moves include:
- FMR LLC (Fidelity) adding about 1.96 million shares,
- DME Capital Management increasing its stake by around 1.04 million shares,
- Several quantitative and hedge funds (like D.E. Shaw and Millennium) significantly trimming or exiting positions.
StocksToTrade’s pre‑earnings piece also highlighted DME Capital’s increased stake as a sign of rising institutional confidence, even as it noted VSCO’s elevated debt‑to‑equity ratio of roughly 2.7 and modest net income levels, underscoring that the turnaround is still in relatively early stages. [34]
In short, big money is involved on both sides, which helps explain the high volatility and sharp price reactions to new information.
Activist investor BBRC vs. the board: a governance catalyst
Adding another layer to the story, Victoria’s Secret is now in the early stages of a governance battle.
BBRC’s campaign
On November 4, 2025, BBRC International PTE Limited, led by Australian retail investor Brett Blundy, publicly released a letter to Victoria’s Secret’s board. Key points from that letter: [35]
- BBRC owns about 12.9% of VSCO, making it the second‑largest shareholder.
- The investor argues that Victoria’s Secret has “tremendous intrinsic value” that has not been fully realized.
- BBRC is calling for:
- The removal of long‑tenured board chair Donna James, whom it labels “over‑tenured” with a “stale perspective”.
- The addition of a shareholder representative to the board, specifically Blundy himself.
- Broader improvements in board composition and governance, including more expertise in technology and cybersecurity.
BBRC criticizes what it describes as the board’s “defensive posture”, including the adoption of a poison pill, and signals that it is prepared to seek board changes at the next shareholder meeting if discussions fail.
The board’s response
The same day, Victoria’s Secret’s board issued a detailed response, emphasizing that: [36]
- The board has “engaged extensively” with BBRC over several years and is actively vetting Blundy’s candidacy and demands.
- Directors cite potential conflicts of interest, competitive concerns and reputational risks tied to some BBRC‑related entities as reasons for a careful process.
- The board highlights what it sees as strong momentum under CEO Hillary Super, claiming total shareholder returns of 89% since her appointment, significantly outperforming both the S&P 1500 Specialty Retail Index and an analyst‑defined peer group.
- The company explicitly identifies shareholder activism and stock‑price volatility among its risk factors and signals that it will file a proxy statement ahead of the next shareholder meeting.
For VSCO shareholders, this dynamic introduces a secondary catalyst beyond operations: depending on how the proxy fight evolves, the outcome could influence board composition, capital allocation and strategic priorities.
Key risks: tariffs, debt, execution and volatility
Despite the upbeat quarter and guidance, investors still face meaningful risks.
Tariff headwinds
Tariffs remain a structural drag on profitability:
- Management expects an approximately $90 million tariff impact in fiscal 2025, only slightly lower than the $100 million previously projected. [37]
- Commentary from both the company and external analysts emphasizes that these tariffs cap margins and earnings power, and are largely outside management’s control. [38]
If trade tensions escalate or tariffs are extended or expanded, the earnings path embedded in current valuation could prove optimistic.
Leverage and balance sheet
StocksToTrade’s analysis notes a debt‑to‑equity ratio around 2.7, indicating meaningful leverage, though supported by positive operating cash flow. [39]
Higher rates (or a reversal in the current rate‑cut expectations) could:
- Increase interest expense, and
- Reduce the flexibility to invest aggressively in brand, technology and international expansion.
Execution risk in a tough retail environment
Victoria’s Secret operates in highly competitive apparel and beauty markets, and its own risk disclosures flag a long list of operational vulnerabilities — from fashion missteps and brand perception to IT systems, cybersecurity and global supply‑chain disruptions. [40]
The Q3 results show that pulling back on promotions and raising prices works in the current demand environment. The open question is how sustainable that strategy is if consumer confidence weakens or new competitors undercut on price.
Stock volatility and sentiment swings
VSCO’s beta above 2.3, frequent >5% daily moves, and intense social‑media attention all point to a stock that can move sharply in either direction on new headlines. [41]
Earnings releases, macro surprises, activist developments, or even a single critical article can trigger large short‑term price swings — a risk for both short‑term traders and long‑term holders.
What could move Victoria’s Secret stock next
Looking ahead from December 6, 2025, several catalysts stand out:
- Holiday‑quarter performance (Q4 2025)
- The company has set the bar for mid‑single‑digit sales growth and robust profitability in its most important quarter of the year. Any miss—or beat—could materially reset valuation expectations. [42]
- Analyst estimate revisions and new targets
- As sell‑side analysts update their models, consensus EPS and price targets may rise, fall or converge, giving the market a clearer picture of where professional forecasters think fair value lies. [43]
- Developments in the BBRC proxy campaign
- Filings of proxy materials, board nominations and any settlement (or escalation) between BBRC and the company could all move the stock, especially if investors expect changes in governance or strategy. [44]
- Macro conditions and interest‑rate decisions
- With markets pricing in a Fed rate cut at the upcoming meeting, any deviation from that script—or surprises in future inflation and employment data—could affect discretionary retail valuations broadly, including VSCO. [45]
- Brand and traffic data points
- Future indications about store traffic, e‑commerce growth, international expansion and the performance of sub‑brands (PINK, Adore Me, Beauty) will help investors judge whether Q3 was a one‑off “beat” or part of a longer trend. [46]
Bottom line: a stronger business, a more demanding valuation
Victoria’s Secret has clearly improved its fundamentals in 2025:
- Sales are growing again,
- Margins are expanding,
- Guidance is moving higher, and
- The brand appears to be regaining momentum with consumers and investors alike. [47]
At the same time, the stock price now embeds a substantial amount of that optimism:
- Shares trade near their 52‑week high,
- Many legacy price targets sit below the current quote, and
- Some valuation frameworks argue the stock is rich relative to its growth and risk profile, while others see it as reasonably or slightly undervalued on a cash‑flow basis. [48]
For prospective or current investors, the key questions now are:
- Can management execute on its upgraded 2025 guidance and sustain double‑digit earnings growth beyond this year?
- Will tariffs, leverage and retail competition cap profitability?
- How will the governance battle with BBRC resolve—and what might that mean for strategy and capital allocation?
Those answers will determine whether Friday’s surge was the beginning of a longer rerating or a short‑term spike in an already volatile stock.
References
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