REYNOLDSBURG, Ohio, September 3, 2026, 09:26 (EDT) — Victoria’s Secret shares dropped 5.6% after the company narrowed a 21% fall in earnings.
- VSXY was last at $80.02, falling 5.6% after reaching $66.89 earlier.
- Adjusted operating income for the quarter more than doubled, reaching $124 million.
- Guidance for the third quarter points to an operating margin of around 1% at the midpoint.
Victoria’s Secret & Co. NYSE:VSXY shares slid 5.6% in premarket trading on Thursday. Following the results, the shares plunged 21.1%. By 09:26 EDT, the stock rebounded to $80.02 Yahoo Finance.
VSXY recovered sharply from the first post-results trade
Five-minute interval prices, U.S. dollars. Previous close: $84.81.
As of . Source: Yahoo Finance. Premarket prices can be volatile.
The decline came after a mixed quarter. Net sales increased by 10.4% to $1.611 billion, just missing the $1.62 billion LSEG consensus estimate, according to Reuters.
Profit increased significantly. Adjusted operating income rose to $124 million, compared with $55 million in the previous year. This result surpassed the company’s guidance of $90 million to $100 million SEC filing.
Underlying operating margin more than doubled
Margins calculated from company-reported sales and adjusted operating income for quarters ended August 2, 2025, and August 1, 2026. Source: Victoria’s Secret SEC exhibit.
The stock initially responded to different factors. Operating income for the third quarter is projected at $10 million to $20 million. Based on the midpoint of sales, this results in a margin of approximately 0.95%.
The annual increase was limited compared with the outperformance in the quarter. Sales outlook was lifted by $60 million at the midpoint. Adjusted operating income guidance climbed by $10 million.
Guidance rose, but the next-quarter margin stayed thin
Midpoints calculated from company guidance issued June 2 and September 3, 2026. Source: Victoria’s Secret.
Victoria’s Secret’s reported earnings reflected a significant one-off item, as the company secured over $140 million in IEEPA tariff refunds. This gain was not factored into the firm’s adjusted figures.
After deducting the $134.5 million gross-profit element, around $624.8 million remains. This represents 38.8% of sales. By comparison, the 2025 figure stood at 35.6%.
Growth in sales was widespread. Revenue from international operations climbed 20.0%. North American store sales advanced 8.9%, and direct sales were up 8.1% SEC filing.
Chief Financial and Operating Officer Scott Sekella pointed to “stronger regular-price selling and disciplined execution.” The management team intends to boost marketing efforts in the second half company release.
Analysts entered results split between buys and holds
Average target before the report: $94.60, 11.5% above Wednesday’s $84.81 close.
S&P Global analyst data last updated September 2, 2026. Targets may change after results. Source: Stock Analysis.
The revised adjusted EPS guidance stands at $4.45-$4.70. With shares at $80.02, the midpoint represents roughly 17.5 times earnings. This continues to factor in that the holiday plan maintains regular-price demand.
Risks: Increased promotional activity, rising marketing expenses, or softer holiday demand could pressure margins. Tariff regulations and how refunds are processed continue to be uncertain.
The upcoming test is execution. Investors are now looking for solid holiday earnings, rather than another single-instance refund.
Related articles: Earnings
