Victoria's Secret & Co. (NYSE:VSCO) shares soared after it reported third-quarter results with net sales of $1.472 billion, up 9% from $1.347 billion a year earlier and above its previously communicated guidance range of $1.390 billion to $1.420 billion.
As per BZ Pro, short interest in Victoria’s Secret rose from 9.61M to 10.92M shares last period, representing 22.79% of the public float; at an average 2.10M shares traded daily, that's about 5.21 days to cover—conditions that can amplify volatility and increase the risk of a short squeeze if momentum turns higher.
Sales of $1.472 billion beat a $1.410 billion estimate. The company reported an operating loss of $19 million, compared with an operating loss of $47 million in the prior-year quarter.
VS&Co posted a net loss of $37 million, or $0.46 per diluted share, versus a net loss of $56 million, or $0.71 per diluted share, a year earlier. Adjusted EPS of $(0.27) beat a $(0.59) estimate.
Hillary Super, VS&Co chief executive officer, said, “We delivered a standout third quarter, with outperformance on net sales and earnings per share, exceeding the high-end of our guidance. Net sales increased 9% over last year, driven by strength across Victoria’s Secret, PINK, and Beauty, and supported by momentum across channels and geographies.”
Related: Top Wall Street Forecasters Revamp Victoria’s Secret Expectations Ahead Of Q3 Earnings
Scott Sekella, VS&Co chief financial and operating officer, said, “Building on strong first-half results, our third quarter exceeded expectations. We delivered robust adjusted gross margin expansion of 170 basis points, driven by a reduced promotional approach and higher regular-priced selling, while leveraging the strength of our business model."
By channel, third-quarter net sales were $778.2 million from Stores – North America, up 5.4% from $738.1 million; $428.5 million from Direct, up 4.3% from $411.0 million; and $264.8 million from International, up 33.5% from $198.3 million. Total comparable sales increased 8% in the quarter.
The company stated that year-to-date results include an approximately $20 million negative impact on direct net sales resulting from the website closure due to the security incident in the second quarter of 2025.
It also stated that, beginning in the third quarter of 2025, direct sales in the European Union will be reported in the International channel, with direct sales in the European Union reaching $12 million in the third quarter of 2025.
Outlook:
For the fourth quarter, VS&Co. forecasted net sales of $2.170 billion to $2.200 billion, compared with $2.106 billion in the prior-year quarter, and stated that this range compares with a $2.171 billion estimate.
It expects adjusted net income per diluted share of $2.20 to $2.45, compared with a $2.23 estimate, and forecasts GAAP EPS of $2.14 to $2.39, compared with a $2.20 estimate.
For fiscal 2025, the company raised its outlook and now forecasts net sales of $6.450 billion to $6.480 billion, compared with prior guidance of $6.330 billion to $6.410 billion. The company stated that the new range compares with a $6.389 billion estimate.
VS&Co raised adjusted net income per diluted share guidance to $2.40 to $2.65 from $1.80 to $2.20, compared with a $2.12 estimate, and forecast FY2025 GAAP EPS of $1.91 to $2.16, compared with a $2.02 estimate.
The outlook includes an estimated net tariff impact of approximately $90 million for fiscal year 2025, compared to prior guidance of $100 million.
The company said last year’s results include an approximately $26 million benefit to net sales, gross margin, and operating income as a result of the company’s cumulative adjustment for its change in accounting estimate related to expected future redemption on outstanding gift cards.
VSCO Price Action: Victoria’s Secret shares were up 15.10% at $47.84 at the time of publication on Friday. The stock is trading near its 52-week high of $48.73, according to Benzinga Pro data.
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