Victoria's Secret (VSCO) investor relations material

Executive summary

• Comparable sales grew 8% in Q4 and 5% for the full year 2025, marking a return to growth and exceeding both revenue and profit guidance.

• Brand momentum accelerated, customer file expanded, and market share increased across all key categories and geographies.

• Transformation strategy executed across four pillars: bra authority, PINK, beauty, and brand projection.

• Adjusted EPS exceeded guidance at $2.77 for Q4 and $3.00 for the year, up 22% year-over-year.

• Management team largely new, driving tangible impact and operational discipline.

Financial highlights

• Q4 2025 net sales were $2.27B, up 8% year-over-year; full-year net sales reached $6.553B, up 5–6%.

• Adjusted operating income was $316M in Q4 and $403M for the year, both above guidance.

• Q4 adjusted gross margin rate was 39.4%; full-year adjusted gross margin was 37.0%.

• Adjusted net income per diluted share was $2.77 in Q4 and $3.00 for the year.

• Free cash flow for the year was $312M, including a $69M one-time litigation benefit; adjusted free cash flow was $244M.

Outlook and guidance

• Fiscal 2026 net sales expected at $6.85B–$6.95B, up 5–6% year-over-year.

• Operating income guidance: $430M–$460M; EPS: $3.20–$3.45.

• Q1 2026 net sales forecasted at $1.49B–$1.53B, up 10–13% year-over-year.

• Capital expenditures planned at $220M–$240M; free cash flow $220M–$250M.

• Store of the Future format to reach 30% of North America fleet and 55% internationally by year-end.