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Victoria's Secret & Co. (VSCO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 earnings release and webcast are scheduled for December 5, 2025 at 8:30 a.m. ET; the company expects to publish the release roughly one hour before the call .
  • Management guided Q3 net sales to $1.390–$1.420B and adjusted diluted EPS to a loss of ($0.55)–($0.75), reflecting continued tariff headwinds; FY 2025 net sales guidance was raised to $6.330–$6.410B while adjusted operating income was reiterated at $270–$320M .
  • Momentum into 2H was highlighted in Q2 with comparable sales up 4% and gross margin rate expansion driven by disciplined inventory and an evolved promotional approach .
  • Potential stock catalysts: magnitude and composition of Q3 loss vs guidance, holiday demand and promotional intensity, and ongoing shareholder activism dialogue noted by the board on November 4, 2025 .

What Went Well and What Went Wrong

What Went Well

  • “Momentum continued building in the second quarter, once again delivering results that beat our sales and operating income guidance… accelerated in July and into August, driven by product innovation, newness and evolved storytelling” — CEO Hillary Super .
  • “We drove gross margin rate expansion in the quarter… driven by disciplined inventory management and our evolving promotional approach” — CFO/COO Scott Sekella .
  • FY 2025 net sales guidance raised to $6.330–$6.410B from $6.2–$6.3B, signaling confidence into holiday and early 2026 demand .

What Went Wrong

  • Q2 GAAP operating income fell to $41M from $62M and diluted EPS declined to $0.20 from $0.40 YoY, reflecting higher SG&A and tariff headwinds .
  • Direct channel net sales declined 5.5% in Q2 YoY, highlighting ongoing digital softness vs prior-year comps .
  • Tariff headwind estimate stepped up to ~$100M for FY 2025 (from ~$50M earlier), increasing pressure on profitability and Q3 adjusted EPS outlook to a loss .

Financial Results

Note: Q3 2025 actuals will be published on December 5; below compares Q1/Q2 actuals vs Q3 guidance and prior-year reference where available.

Quarterly performance and guidance

MetricQ1 2025Q2 2025Q3 2025 Guidance
Revenue ($USD Billions)$1.353 $1.459 $1.390–$1.420
Operating Income ($USD Millions)$19.8 $40.9 Adjusted operating loss: ($35)–($55)
Net Income ($USD Millions)$(1.7) $16.2 N/A (guided via adjusted EPS)
Diluted EPS (GAAP, $USD)$(0.02) $0.20 N/A
Adjusted Operating Income ($USD Millions)$31.7 $55.1 (loss) ($35)–($55)
Adjusted Diluted EPS ($USD)$0.09 $0.33 ($0.55)–($0.75)
Comparable Sales YoY (%)(1%) +4% N/A

Channel/segment net sales

Channel ($USD Millions)Q1 2025Q2 2025
Stores – North America$721.3 $824.8
Direct$433.2 $406.5
International$198.4 $227.8
Total$1,352.9 $1,459.1

KPIs

KPIQ1 2025Q2 2025
Total Stores (all formats)1,378 1,376

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Billions)FY 2025$6.2–$6.3 $6.330–$6.410 Raised
Adjusted Operating Income ($USD Millions)FY 2025$300–$350 (prior); revised to $270–$320 $270–$320 (reiterated) Maintained at revised level
Net Tariff Impact ($USD Millions)FY 2025~$50 ~$100 Increased
Net Sales ($USD Billions)Q3 2025N/A$1.390–$1.420 New period guidance
Adjusted Operating IncomeQ3 2025N/A(loss) ($35)–($55) New period guidance
Adjusted Diluted EPSQ3 2025N/A($0.55)–($0.75) New period guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q1 2025)Current Period (Q3 2025)Trend
Product innovation and brand storytellingMomentum driven by “product innovation, newness and evolved storytelling” (acceleration into July/August) Strength in Beauty, PINK apparel; newness in sport and swim Release pending Dec 5; call scheduled Improving narrative into 2H
Gross margin and promotional disciplineGross margin rate expansion; inventory discipline; evolved promotional approach Disciplined execution to exceed sales/OI expectations PendingPositive into Q2, watch holiday margin vs promo
Tariffs/macro headwindsAcknowledged macro uncertainty; tariff headwind persisted Macro uncertainty; controlled costs FY tariff headwind now ~$100M Worsening vs prior
Digital/Direct channelQ2 Direct -5.5% YoY Q1 Direct -3.5% YoY PendingMixed trajectory; monitor Q3
International growthQ2 International +21.8% YoY Q1 International +9.3% YoY PendingStrengthening
Technology/cybersecurity—Security incident disclosed; ops largely restored No new update in Q3 materials yetStabilized after Q1 incident

Management Commentary

  • CEO Hillary Super: “Momentum continued… delivering results that beat our sales and operating income guidance… driven by product innovation, newness and evolved storytelling” .
  • CFO/COO Scott Sekella: “Despite tariff headwinds, we drove gross margin rate expansion… driven by disciplined inventory management and our evolving promotional approach” .
  • CEO Hillary Super (Q1): “Strength… continued momentum in our powerhouse Beauty business, ongoing strength in PINK apparel, and newness in sport and swim as we reclaim our position as a full lifestyle brand” .

Q&A Highlights

  • Not available. The Q3 2025 earnings call will be held December 5, 2025; webcast and dial-in details are posted on the investor site .

Estimates Context

  • S&P Global consensus for Q3 2025 EPS and revenue was unavailable at time of writing due to retrieval limits. Values retrieved from S&P Global.* The company’s own Q3 guidance implies adjusted EPS ($0.55)–($0.75) and net sales $1.390–$1.420B .

Key Takeaways for Investors

  • Setup into Q3: Management raised FY sales guidance and reiterated AOI despite a larger tariff headwind; monitor whether Q3 print tracks the mid-to-high end of net sales guidance and narrows the adjusted loss range .
  • Margin watch: Q2 gross margin rate expanded on inventory discipline and less promotionality; holiday cadence will be critical to sustain this into Q3/Q4 .
  • Channel mix: Stores North America grew in Q1/Q2 while Direct contracted; holiday digital performance is a key swing factor for Q3 .
  • International strength: Double-digit International growth in Q1/Q2 supports top-line diversification; watch China JV and wholesale/royalty contributions in Q3 .
  • Tariff sensitivity: FY tariff headwind now ~$100M; any mitigation via pricing, sourcing or promo strategy could materially influence the EPS trajectory .
  • Event catalysts: December 5 call, holiday commentary, and any update on shareholder activism noted by the Board (Nov 4) could drive sentiment and volatility .
  • Leadership and brand execution: New CEO messaging underscores storytelling and innovation; continued comps momentum into late summer suggests execution improvements that could carry into holiday .

Appendix: Prior Quarter Reference Data

  • Q1 2025 key results: Net sales $1.353B; operating income $19.8M; GAAP diluted EPS ($0.02); adjusted operating income $31.7M; adjusted EPS $0.09 .
  • Q2 2025 key results: Net sales $1.459B; operating income $40.9M; GAAP diluted EPS $0.20; adjusted operating income $55.1M; adjusted EPS $0.33; comps +4% .
  • Q3 2025 guidance: Net sales $1.390–$1.420B; adjusted operating loss ($35)–($55)M; adjusted diluted EPS ($0.55)–($0.75) .