Victoria’s Secret delivered third quarter results that significantly surpassed Wall Street’s expectations, supported by broad-based sales and margin expansion across its core brands. Management pointed to a clear shift in customer engagement and brand momentum, highlighting the impact of the revived Victoria’s Secret Fashion Show and targeted marketing driving customer acquisition. CEO Hillary Super described the results as “a powerful multiplier effect,” with the Intimates business returning to growth and market share gains in a declining U.S. category. The company also reported its first customer file growth of the year, fueled by new and reactivated shoppers, particularly among younger demographics.
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Victoria's Secret (VSCO) Q3 CY2025 Highlights:
- Revenue: $1.47 billion vs analyst estimates of $1.41 billion (9.2% year-on-year growth, 4.7% beat)
- Adjusted EPS: -$0.27 vs analyst estimates of -$0.59 (54.2% beat)
- Adjusted EBITDA: $60.66 million vs analyst estimates of $7.81 million (4.1% margin, significant beat)
- Revenue Guidance for Q4 CY2025 is $2.19 billion at the midpoint, above analyst estimates of $2.17 billion
- Adjusted EPS guidance for the full year is $2.53 at the midpoint, beating analyst estimates by 19%
- Operating Margin: -1.3%, up from -3.5% in the same quarter last year
- Locations: 1,404 at quarter end, up from 1,380 in the same quarter last year
- Same-Store Sales rose 8% year on year (3% in the same quarter last year)
- Market Capitalization: $4.23 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Victoria's Secret’s Q3 Earnings Call
- Mauricio Serna (UBS) asked about sustaining momentum post-fashion show and market share growth in bras and beauty. CEO Hillary Super emphasized ongoing innovation, particularly in bras, and a focus on new customer acquisition, with strong early signals in 2026 planning.
- Brooke Roach (Goldman Sachs) inquired about the profile of new customers and future marketing spend. Super noted customer growth was strongest among 18-24-year-olds, with higher average order values, and CFO Scott Sekella indicated continued marketing investment to sustain momentum.
- Adrienne Yih (Barclays) questioned the bra launch pipeline and trends in PINK. Super explained the importance of frequent bra launches and leveraging fashion cycles, with PINK apparel now leading category growth and benefiting from collaborations and full-funnel marketing.
- Matthew Boss (JPMorgan) probed margin improvement and the impact of reduced promotions. Sekella outlined that while promotional pullback is ongoing, operating leverage from sales growth will be the main driver of margin expansion over the next few years.
- Dana Telsey (Telsey Advisory Group) asked about growth in beauty and the Store of the Future. Super discussed the opportunity in cross-selling beauty to the existing customer base and Sekella described plans to enhance stores, especially with integrated assortments and customer-focused improvements.
Catalysts in Upcoming Quarters
In future quarters, our analysts will monitor (1) the pace of product innovation in bras and beauty, especially upcoming launches and collaborations; (2) the effectiveness of digital and social campaigns in driving new customer acquisition and engagement; and (3) continued progress in margin expansion despite tariff-related cost pressures. Execution on store format upgrades and international expansion will also be key signposts for sustained growth.
Victoria's Secret currently trades at $52.84, up from $41.57 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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