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Victoria’s Secret’s turnaround draws debate on whether shares already priced
After Q2 results, management raised full year guidance, while analysts cited near-term headwinds tied to promotions and inventory timing.
Victoria’s Secret & Co. reported second-quarter results for the period ended August 1, 2026, with net sales up 10% to $1.611 billion and adjusted diluted earnings per share nearly tripling to $0.95 from $0.33. Management also raised full-year guidance for net sales, adjusted operating income, and adjusted earnings per share.
The company attributed momentum to the bra business, which drove roughly half of brand growth, and to international sales rising 20% to $273.4 million. Product performance included regular-price gains in the Very Sexy Envy bra, tied to the franchise’s 25th anniversary, and progress at PINK, which grew high single digits behind its first new bra pillar in two years, while Beauty extended growth for 12 consecutive quarters.
Street responses highlighted both confidence and valuation concerns. Morgan Stanley raised its target to $101 from $99 with an Overweight view, pointing to the durability of the turnaround and noting the stock is down more than 8% over the past month despite a 40% plus year-to-date gain; JPMorgan kept an Overweight stance and target at $110, saying management flagged two temporary headwinds instead of a deeper issue, including reduced Semi-Annual Sale discount rates and lower inventory following a stronger-than-planned first half, plus World Cup and Prime Day timing that hurt mall traffic.
Other firms were more cautious on how much recovery is already reflected in the shares. BMO initiated coverage at Market Perform with an $80 target, while UBS lowered its price target to $87 from $95 and maintained a Neutral rating, arguing that management’s longer-term EPS outlook of an 11% four-year compound annual growth rate beyond fiscal 2026 appears to be priced in.