Victoria's Secret (VSCO) Q4 2025 earnings summary

Executive summary

• Q4 2024 net sales were $2.11B, up 1% year-over-year, with 5% comparable sales growth across all brands and channels; full-year net sales reached $6.23B, also up 1%.

• Adjusted Q4 net income was $216.4M (up 6% year-over-year), with adjusted EPS of $2.60 (up 1%); full-year adjusted net income was $218M (up 22%) and adjusted EPS was $2.69 (up 19%).

• Operating income and EPS exceeded expectations, supported by cost control, inventory management, and reduced promotional activity.

• International retail sales grew double digits, driven by franchise, travel retail, and joint ventures, with new markets like Vietnam and Argentina added in 2024.

• The company is executing a multi-pronged growth strategy, "Path to Potential," focused on brand differentiation, product innovation, and international expansion.

Financial highlights

• Q4 adjusted gross margin was 39.7% (down 30 bps year-over-year); full-year adjusted gross margin was 37.0% (up 20 bps).

• Q4 adjusted SG&A expense rate improved by 100 bps to 25.4%; full year improved by 50 bps to 31.0%.

• Adjusted free cash flow for 2024 was $247M; capital expenditures were $178M.

• 2024 saw nearly $200 million in cost savings, completing the three-year $250 million Transform the Foundation goal ahead of schedule.

• Cash and equivalents at year-end were $270M; long-term debt was $973M.

Outlook and guidance

• FY25 revenue guidance is $6.2–$6.3 billion, flat to up 1–2% year-over-year, with Q1 expected down 2–4% and improvement in Q2–Q4.

• Adjusted operating income for FY25 is forecasted at $300M–$350M; adjusted EPS guidance is $2.00–$2.45.

• Q1 2025 net sales expected at $1.30B–$1.33B; adjusted operating income $10M–$30M.

• Tariffs on China (10%) are expected to impact the back half of the year by $10–$20 million.

• Promotional activity is planned to be lower than last year, supporting gross margin.