Victoria’s Secret & Co. (VSXY) reported a significant increase in financial performance, raising its fiscal 2026 net sales guidance to between $7.10 billion and $7.18 billion, representing an 8%-10% growth from fiscal 2025. The company also projected a 56.3% earnings growth for the current fiscal year, with adjusted earnings reaching 95 cents per share—up 187.9% year over year and exceeding the Zacks Consensus Estimate by 21.8%.
Despite strong growth, VSXY’s stock trades at 14.13 times forward earnings, surpassing the industry average of 12.18 and its five-year median of 9.14. Concerns such as rising tariff costs and increased marketing expenses pose risks, alongside a reported 8% year-over-year increase in inventory, emphasizing the need for sustained demand.
International sales rose by 20% in the second quarter, with strong performance in China and other categories like PINK and Beauty contributing to overall growth. However, with rising costs and heightened competition from brands like American Eagle and Abercrombie & Fitch, the company faces challenges in maintaining its current valuation amid uncertainties in consumer demand.
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