VSCO Stock Forecast & Price Target

Victoria's Secret & Co experienced a positive shift in its market position, gaining over 1% market share in the US intimates business, despite a contracting overall market. The company reported a revenue increase of mid-single digits, with the PINK brand achieving low double-digit growth, driven by successful product launches and heightened consumer interest following the Fashion Show. Additionally, improved gross margins were noted due to reduced promotions and stronger regular price selling, alongside increased store and digital traffic year-over-year, indicating a resilient performance amidst macroeconomic challenges.

Victoria's Secret & Co. is experiencing declining operating margins, with a forecasted margin of 4.8% for FY25 compared to a historic high of 12.8% in FY21, reflecting ongoing pressures from limited sales growth and rising expenses. The company reported a negative 1% comparable sales growth in Q1 FY25 and a declining trend in consumer spending amid macroeconomic uncertainties, contributing to a cautious outlook for future performance. Additionally, risks related to inflation, commodity cost volatility, and rising interest rates pose significant challenges to the company's ability to achieve its projected low double-digit operating margin.