Victoria's Secret stock soars 45% on beat earnings estimates and boosted outlook

Shares of lingerie maker Victoria’s Secret surged in early trading on Tuesday after the retailer reported earnings that were double Wall Street’s expectations. The company, once the dominant player in its market before losing ground to rivals, is now staging a comeback by betting on a “new era of sexy.”

Victoria’s Secret shares jumped around 45% on Tuesday after the company released its earnings report. Revenue for the first quarter of its fiscal 2026, ended May 2, increased 15% year over year to $1.56 billion, exceeding analysts’ expectations. Comparable sales rose 13%, also topping forecasts. Adjusted earnings came in at $0.60 per diluted share, versus Wall Street estimates of $0.30 per diluted share.

Following the strong results, the company raised its full-year revenue forecast to $7.03-7.13 billion from its previous guidance of $6.85-6.95 billion. Adjusted operating income is now expected to reach $550-580 million, up from the prior forecast of $430-460 million.

“There was ‘very consistent, double-digit [sales] increases across Victoria’s Secret, Pink, beauty channels, digital, stores and international, all very positive,’” Victoria’s Secret CEO Hillary Super, who has spearheaded the company’s transformation, said in an interview with CNBC.

According to Super, one of the main growth drivers was the bra category, where sales increased at a double-digit rate. It is one of the segments where the retailer had lost momentum after years of market leadership.

The company also said it was able to grow sales with significantly fewer promotions and increase market share, particularly among shoppers aged 18-44. Between 2015 and 2018, when demand for Victoria’s Secret products began to weaken, the retailer frequently relied on deep discounts to attract consumers.

The strongest sales growth in the last quarter came from customers with annual incomes below $50,000 and above $200,000, Super said. That points to demand for the company’s products rather than interest in lower prices or discounts, CNBC noted.

The improved outlook indicates that the turnaround is gaining momentum, Bloomberg wrote. Since Super took over in 2024, comparable sales have declined only once. Prior to her appointment, they had fallen every quarter for more than two years. Investors have taken notice: Victoria’s Secret shares have more than doubled during her tenure.

The stock’s rally on Tuesday may also have been amplified by the large number of investors betting against the company, Bloomberg noted. According to S3 Partners data, roughly 19% of Victoria’s Secret’s free float was sold short. Against the backdrop of the rally, that may have triggered a short squeeze.

Over the last several years, Victoria’s Secret has faced a host of ambitious competitors that have chipped away at its market share amid changing views on beauty standards and criticism over promoting unrealistic stereotypes, particularly through its models, CNBC noted. The brand became “watered down” because it was trying too hard not to offend anyone and to appeal to everyone, Super explained in an interview with the Wall Street Journal.

She has focused on restoring the retailer’s core identity – a sexy lingerie brand that does not sacrifice comfort, but offers products that are more emotional than utilitarian, CNBC noted. The company has once again made bras a strategic priority, including an updated Very Sexy collection featuring double push-up styles, while also reinvigorating PINK, its brand aimed at younger consumers.

The strategy of returning to the company’s roots has also included reviving the Victoria’s Secret Fashion Show, which had not been held for several years. The show’s return is intended to mark a “new era of sexy” for the company, Super said.

In addition, Victoria’s Secret recently changed its stock ticker symbol to VSXY. “Sexy has always been part of our DNA,” Super said in a letter at the time.