Victoria's Secret posts longest sales growth streak in four years, but stock tanks

Shares of Victoria’s Secret & Co., owner of the eponymous lingerie brand, fell more than 12% on Thursday, even after the company reported strong fourth-quarter results and sales that beat Wall Street forecasts. The results, however, fell short of investors’ elevated expectations, argues Guggenheim Partners analyst Simeon Siegel.

Victoria’s Secret shares fell more than 12% on the New York Stock Exchange on Thursday to $52.70 apiece, the lowest level since September. In early trading on Friday, the stock continued to decline, falling more than 1% as of this writing.

The selloff followed the company’s fourth-quarter and full-year earnings, released on Thursday, which the company called "exceptional."

Victoria’s Secret reported fourth-quarter revenue of $2.27 billion, up 8% year over year and about 3% above the top end of the company’s guidance. Comparable sales also increased 8%. According to StreetAccount data, comparable sales have risen for three consecutive quarters – the longest streak of growth in at least four years, CNBC reports. Customers have responded positively to the company’s product assortment and marketing initiatives, CEO Hillary Super said in the earnings release. Bloomberg noted that Super has been expanding the company’s beauty business while working to revitalize Victoria’s Secret’s core categories, particularly bras and the PINK brand aimed at younger consumers.

For full-year 2025, revenue rose 5% to $6.55 billion, exceeding the company’s forecast by about 1%. “Our 2025 results reflect the progress we have made against our Path to Potential strategy as we build brand heat and powerful connections with our customers around the world,” Super said.

She added that "with a clear brand vision, a faster and more agile operating model, and a strong pipeline of product and brand moments ahead, we are confident in our ability to deliver profitable growth and create long‑term shareholder value."

Victoria’s Secret guides for 2026 revenue of $6.85-6.95 billion, above Wall Street’s expectation of $6.80 billion, CNBC reported. Operating income in 2026 is expected to reach $430-460 million, versus Wall Street expectations of $421 million, Barron's notes. The guidance assumes U.S. tariffs remain at the same level as before the Supreme Court ruling that struck down Trump's sweeping global duties. In 2025, tariffs reduced the company’s adjusted operating income by about $85 million, Barron’s wrote.

Despite the strong results and optimistic guidance, the market reaction was negative. “We believe VSCO posted strong results and offered above-Street guidance, however, we also believe expectations had run up, explaining the pre-market pressure,” wrote Simeon Siegel, an analyst at Guggenheim Partners, as cited by Barron's. He did not specify what exactly investors had anticipated.

Over the last 12 months, Victoria’s Secret shares have risen more than 137%. Year to date, however, they are down about 3%.

Following the latest earnings, at least one Wall Street firm has raised its target price for the stock, by about 7.6% to $71 per share, according to Yahoo Finance data. Overall, Wall Street remains split on the stock's outlook: six houses recommend “buy,” while six recommend “hold.” The average target price stands at $64.22 per share, implying roughly 22% upside from current levels.