Victoria’s Secret Beats Forecasts as Turnaround Plan Gains Traction
Victoria’s Secret delivered a strong finish to its fiscal year, surpassing Wall Street’s expectations for both earnings and revenue and providing an optimistic outlook for 2025. The results indicate that CEO Hillary Super’s multi-pronged strategy to revitalize the legacy brand is resonating with consumers, marking a sustained period of growth not seen in years.
Strong Holiday Quarter and Upbeat Guidance
For the fiscal fourth quarter ended January 31, the company reported adjusted earnings per share of $2.77, beating the $2.52 estimate from analysts surveyed by LSEG. Revenue reached $2.27 billion, up approximately 8% from $2.11 billion a year earlier and exceeding the $2.23 billion forecast. Net income for the quarter was $183.63 million, or $2.14 per share, compared to $193.4 million, or $2.33 per share, in the prior-year period.
The robust performance was driven by a significant 8% increase in comparable sales, which outpaced the 5.6% growth analysts had anticipated. This marks the third consecutive quarter of comp growth and the longest sustained positive streak in at least four years, according to FactSet data.
Looking ahead, Victoria’s Secret provided guidance that also exceeded expectations. For the current quarter, it projects sales between $1.49 billion and $1.53 billion, versus a consensus estimate of $1.42 billion. For the full 2025 year, the company anticipates sales of $6.85 billion to $6.95 billion, above the $6.8 billion expectation.
The “Path to Potential” Strategy Shows Results
CEO Hillary Super, who took the helm about 18 months ago, has been executing a strategy focused on reigniting brand heat and deepening customer connections. Key pillars include a revamped marketing approach, a major investment in its $1 billion beauty business, a recommitment to the popular Pink line, and a renewed focus on its core bra category.
“In the quarter, our customer responded enthusiastically to our product and marketing, as demonstrated by growing new customer acquisition and increased [average unit retails],” Super said in a statement. “Our 2025 results reflect the progress we have made against our Path to Potential strategy.” The increase in average transaction value suggests customers are buying more premium items or multiples, a positive sign for the brand’s recovery.
A Long Road to Recovery
Victoria’s Secret’s journey back to growth has been arduous. Following its spin-off from L Brands in 2021, the brand struggled with an identity crisis. Its historical focus on ultra-sexy styling and marketing was increasingly seen as out-of-touch, pushing shoppers toward more inclusive competitors and emerging digital-native brands, leading to a erosion of market share.
The 2022 acquisition of Adore Me was a pivotal attempt to address this, aiming to capture a broader range of customers through inclusive sizing and a wider style spectrum. However, integrating the digital-first brand proved challenging and did not immediately translate into sustained, company-wide growth.
Strategic Review and Market Reaction
Despite the upbeat results and forecast, Victoria’s Secret shares fell more than 10% in midday trading on Thursday. The decline suggests some investor skepticism about the sustainability of the turnaround or potential concerns buried within the details.
The company took $119.6 million in impairment charges related to the Adore Me acquisition during the quarter. Furthermore, it announced the initiation of a “strategic review” of DailyLook, another brand acquired via the Adore Me deal. Such reviews often precede a sale, indicating a potential scaling back of the acquisition-driven growth strategy.
While the core Victoria’s Secret brand shows clear signs of improvement under Super’s leadership, the path forward involves navigating the legacy of past acquisitions and proving that the recent momentum can be maintained long-term. The market’s mixed reaction underscores the high-stakes nature of this turnaround.
This article is based on the original reporting by Victoria’s Secret and analysis by CNBC’s Scott Mlyn. All financial data and quotes are sourced from the company’s official fiscal fourth-quarter earnings release and related statements.
