VSCO Stock Forecast & Price Target

Victoria's Secret & Co demonstrated a positive trajectory in Q3, growing its US market share in the intimates sector despite a contraction in the overall market. The company's revenue exhibited a mid-single-digit increase, driven by strong performances from both its Victoria's Secret and PINK brands, with the latter achieving low double-digit growth. Furthermore, improvements in gross margins due to reduced promotions and an increase in regular-priced sales, alongside stronger store and digital traffic, point to a healthy financial outlook for the company.

Victoria's Secret & Co is experiencing significant pressure on its operating margins, having reported a decline from 12.8% in FY21 to a forecasted 4.8% for FY25, largely due to stagnant sales growth and increased operating expenses. The company's recent performance indicators, including a negative 1% comparable sales growth for Q1 and challenges in maintaining positive comp growth in a tough economic environment, reflect ongoing difficulties in achieving profitability. Additionally, macroeconomic concerns, such as inflation and rising interest rates, further exacerbate the company's outlook, indicating potential risks to both consumer spending and overall financial stability.