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  • Professor Andrea M. Armani, University of Southern California
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  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

The 5 Most Interesting Analyst Questions From Victoria's Secret’s Q2 Earnings Call

VSCO Cover Image

Victoria’s Secret entered the second quarter with operational changes and a renewed brand strategy, but the market responded negatively despite results that exceeded Wall Street’s revenue and profit expectations. Management pointed to ongoing improvements in store traffic and a shift towards higher-quality, regular-priced sales as key drivers. CEO Hillary Super highlighted the success of product launches like Body by Victoria and new marketing approaches, stating, “Momentum in the second quarter grew steadily as the quarter progressed, culminating in July, which was our strongest month of the quarter in terms of sales and new customer growth.”

Is now the time to buy VSCO? Find out in our full research report (it’s free).

Victoria's Secret (VSCO) Q2 CY2025 Highlights:

  • Revenue: $1.46 billion vs analyst estimates of $1.40 billion (3% year-on-year growth, 4% beat)
  • Adjusted EPS: $0.33 vs analyst estimates of $0.13 (significant beat)
  • Adjusted EBITDA: $117.9 million vs analyst estimates of $86.72 million (8.1% margin, 35.9% beat)
  • The company lifted its revenue guidance for the full year to $6.37 billion at the midpoint from $6.25 billion, a 1.9% increase
  • Adjusted EPS guidance for Q3 CY2025 is -$0.65 at the midpoint, below analyst estimates of -$0.56
  • Operating Margin: 2.8%, down from 4.4% in the same quarter last year
  • Locations: 1,376 at quarter end, up from 1,373 in the same quarter last year
  • Same-Store Sales rose 4% year on year (-3% in the same quarter last year)
  • Market Capitalization: $1.83 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 Q2 Earnings Call

  • Lauren Levine (Morgan Stanley) asked about the impact of the end of the de minimis exemption. CFO Scott Sekella clarified it is not material to Victoria’s Secret, as most e-commerce distribution is domestic.
  • Marni Shapiro (Retail Tracker) questioned whether the current pace of product and fashion innovation will continue into 2026 despite tariff challenges. CEO Hillary Super responded that a faster, more frequent launch cycle is now a core part of the strategy and will expand across categories.
  • Dana Telsey (Telsey Group) inquired about the sustainability of lower discounting and the impact of Store of the Future remodels on traffic. Sekella said reduced promotions are expected to continue, and remodeled stores are seeing double-digit sales lifts.
  • Michael Vu (Barclays) sought details on international performance drivers. Super explained that Beauty and intimates are the main growth categories globally, with consistent go-to-market strategies across regions.
  • Janet Kloppenburg (JJK Research Associates) pressed on inventory planning and pricing power, particularly in panties. Super noted improved lead times and said that strategic price increases in gifting and beauty were accepted by customers, while panties remain a traffic driver with ongoing pricing tests.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will focus on (1) whether new product launches and marketing events like the fashion show sustain customer acquisition and traffic gains, (2) the effectiveness of tariff mitigation strategies on gross margins and operating income, and (3) ongoing progress in international markets, especially China. Execution on inventory optimization and the ability to maintain regular-priced selling will also be critical signposts.

Victoria's Secret currently trades at $23, up from $22.76 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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