VSCO Stock Forecast & Price Target

Victoria's Secret & Co experienced a growth of low-single digits in US market share during Q3, capturing over 1% of the intimates business market despite overall contraction. The company's revenue rose by mid-single digits, with the PINK brand achieving low double-digit growth, bolstered by successful marketing initiatives such as the Fashion Show which positively impacted product sales. Additionally, the gross margin exceeded expectations due to reduced promotions and increased regular price selling, complemented by strong store and digital traffic growth, indicating a positive trajectory for the brand.

Victoria's Secret & Co is facing declining operating margins, with projections for FY25 indicating a further drop to 4.8%, down from a previous 6.0% margin in FY24 and significantly below the 12.8% margin achieved in FY21. The company has struggled with limited sales growth and unease in the retail sector, evidenced by disappointing same-store sales which posted negative comp results in recent quarters, showing a trend of declining performance. Additionally, macroeconomic challenges such as inflation, rising interest rates, and reduced consumer confidence pose significant risks to Victoria's Secret's future financial performance.