VSCO Stock Forecast & Price Target

Victoria's Secret & Co has demonstrated significant segment momentum, with system-wide retail sales increasing double-digits year-over-year, driven by stronger performance from its franchise and travel retail partners, as well as joint ventures in markets like China and the UK. The company's brands, Victoria's Secret and PINK, have both benefited from increased product innovation, leading to robust sales performance during the holiday season, with reported total sales rising 1.1% to $2.106 billion. Additionally, the outlook for net sales in Q4 has improved, with projections of a 3%-4% year-over-year increase, reflecting positive market conditions and store traffic outperforming mall averages.

Victoria's Secret & Co. is facing a challenging financial outlook, as sales for the first quarter are projected to decline to approximately $1.30B-$1.33B, falling short of both the previous year's $1.36B and analyst expectations of $1.40B. Additionally, the company's guidance for FY25 earnings per share (EPS) has been considerably lowered to $2.00-$2.45, significantly below the prior consensus of $2.80, which is indicative of broader operational difficulties. Despite a slight reduction in selling, general, and administrative (SG&A) expenses, the anticipated adjusted operating income of $10MM-$30MM for Q1 represents a decline from the $40MM reported in the previous year and further contributes to the negative sentiment surrounding the stock.