Victoria's Secret stock soared 45%. The sexy bet worked

Shares of lingerie maker Victoria's Secret rose sharply in early trading on June 2 after the retailer's profit was twice as high as Wall Street had expected. The company, once a market leader that lost ground, is now rebounding, betting on a "new era of sexy."

Victoria's Secret stock jumped nearly 45% on Tuesday after the company released its report. Its revenue for the first quarter of fiscal 2026, which ended May 2, rose 15% to $1.56 billion, exceeding analysts' expectations. Comparable sales rose 13%, which was also better than forecasts. Adjusted earnings per share came in at 60 cents versus the market's estimate of 30 cents.

On the back of the strong results, the company improved its full-year revenue outlook to $7.03-7.13 billion from $6.85-6.95 billion, while adjusted operating income should be $550-580 million instead of the previous $430-460 million.

"We recorded double-digit sales growth across all key businesses - Victoria's Secret, Pink, the cosmetics division, digital channels, stores and the international segment," Victoria's Secret CEO Hillary Super, who has been an ideologue behind the company's transformation, told CNBC.

According to her, one of the main growth drivers was sales of bras, which increased at double-digit rates. This is one of the areas in which the retailer lost ground after years of leadership.

The company also noted that it was able to grow sales with significantly fewer promotions and increase market share, especially among shoppers between the ages of 18 and 44. Between 2015 and 2018, when demand for Victoria's Secret products began to weaken, it had to resort to massive discounts to attract consumers. The highest sales growth last quarter, Super said was seen among customers with annual incomes of less than $50,000 and more than $200,000. That indicates interest in the company's products, not low prices or discounts, CNBC notes.

The improved forecast indicates that the recovery is gaining momentum, Bloomberg writes. Since Super took over in 2024, comparable sales have declined only once. Before her appointment, it was every quarter for more than two years. This was noted by investors: Victoria's Secret shares more than doubled in price during this period.

The growth of quotations on June 2 could have been strengthened by a large number of investors betting on their decrease, Bloomberg notes. According to S3 Partners data, short positions were opened on about 19% of Victoria's Secret securities in free circulation. On the background of rally it could provoke short-squeeze.

Over the past few years, Victoria's Secret has faced a number of ambitious competitors who have begun to take back market share, amid changing views on beauty standards and criticism for promoting unrealistic stereotypes, especially through its models, CNBC notes. The brand became "watered down" as it tried too hard not to hurt anyone and to please all audiences, the head of the company explained in an interview with The Wall Street Journal.

It has made a bid to return the legendary retailer to its core identity - a sexy lingerie brand that doesn't sacrifice comfort but offers products that are emotional rather than functional, CNBC noted. The company has re-energized its bra line, including a revamped "Very Sexy" line with a double push-up effect, as well as a Pink brand aimed at a younger audience.

The strategy to return to its roots also included reviving the Victoria's Secret Fashion Show, which had not been held for several years. The return of the show should herald a "new era of sexuality" for the company, Super said.

In addition, in early June, Victoria's Secret changed the ticker symbol under which its stock trades on the stock exchange - to VSXY. "Sexuality has always been part of our DNA," Super stated at the time.