Victoria's Secret (VSCO) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 2025 rose 3% year-over-year to $1.459 billion, with comparable sales up 4% and international sales up 22%, led by growth in Victoria's Secret and PINK, despite a 5% decline in direct channel sales due to a security incident.

• Adjusted operating income reached $55 million, surpassing guidance by $20 million, though operating income fell to $41 million due to higher tariffs, transportation, and incentive compensation costs.

• Adjusted net income attributable to shareholders was $27 million ($0.33 per diluted share), down from $32 million ($0.40 per share) last year, with adjusted EPS declining 18% year-over-year.

• Gross margin improved to 35.6%, up 20 basis points year-over-year, driven by reduced discounting and higher regular price sales.

• Strategic focus on innovation, brand repositioning, and customer engagement is driving momentum, with new product launches and marketing initiatives planned for the second half.

Financial highlights

• Net sales: $1.459 billion, up 3% year-over-year, with gross profit at $519 million and gross margin at 35.6%.

• Adjusted operating income: $55 million, adjusted operating margin 3.8%, both above guidance.

• Adjusted net income per diluted share: $0.33, above the high end of guidance but down from $0.40 last year.

• Cash and equivalents at quarter-end: $188 million, up from $169 million a year ago.

• Year-to-date net sales increased 1% to $2.81 billion, with adjusted net income down 16% to $34.1 million.

Outlook and guidance

• Full-year 2025 net sales forecast raised to $6.33–$6.41 billion, with adjusted EPS guidance of $1.80–$2.20.

• Adjusted operating income guidance maintained at $270–$320 million, despite $50 million in incremental tariff pressure.

• Q3 2025 net sales forecast: $1.39–$1.42 billion; adjusted operating loss expected at $35–$55 million.

• Capital expenditures for 2025 expected at $200 million, down from $220 million.

• Adjusted free cash flow for 2025 forecasted at $150–$200 million.