Group 1 - The company is experiencing limited overall growth, with indications that the U.S. business is performing significantly better [1] - The investment approach focuses on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The majority of investment calls are expected to be holds, reflecting a cautious stance in a bullish market [1] Group 2 - There is no current stock or derivative position held by the analyst in the companies mentioned, nor any plans to initiate such positions in the near term [2] - The article expresses the author's personal opinions and is not influenced by compensation from any company mentioned [2] Group 3 - Seeking Alpha emphasizes that past performance does not guarantee future results and that no specific investment recommendations are provided [3] - The views expressed may not represent those of Seeking Alpha as a whole, highlighting the diversity of opinions among analysts [3]

Core Viewpoint - Victoria's Secret & Co. will participate in a fireside chat at the Goldman Sachs 32nd Annual Global Retailing conference on September 4, 2025, featuring CEO Hillary Super and CFO Scott Sekella [1]. Company Overview - Victoria's Secret & Co. is a specialty retailer offering modern, fashion-inspired collections, including bras, panties, lingerie, apparel, casual sleepwear, swimwear, lounge, and sport items, as well as prestige fragrances and body care [3]. - The company operates leading brands, Victoria's Secret and PINK, and also includes Adore Me, a technology-driven, digital-first intimates brand catering to women of all sizes and budgets [3]. - Victoria's Secret & Co. employs over 30,000 associates and has approximately 1,380 retail stores across nearly 70 countries [3]. Event Details - A live audio webcast of the fireside chat will be available on the company's investor relations website, with a replay accessible afterward [2].

Core Insights - Victoria's Secret reported Q2 2025 net sales of $1.459 billion, a 3% year-over-year increase, exceeding the guidance range of $1.38 billion to $1.41 billion [1] - Comparable sales grew by 4% during the same period, indicating strong performance across various channels [1] - Adjusted operating income reached $55 million, surpassing the previous guidance of $15 million to $35 million [1] - Adjusted net income was $27 million, with diluted earnings per share of $0.33, also exceeding the prior guidance of $0 to $0.15 [1] - Based on Q2 performance, the company raised its full-year net sales forecast to a range of $6.33 billion to $6.41 billion, up from the previous range of $6.2 billion to $6.3 billion [1] - CEO Hillary Super highlighted strong growth momentum in Q2, with sales and operating profit exceeding guidance, driven by product innovation and brand storytelling [1] Financial Performance - Q2 2025 net sales: $1.459 billion, up 3% year-over-year [1] - Comparable sales growth: 4% [1] - Adjusted operating income: $55 million, exceeding guidance [1] - Adjusted net income: $27 million, diluted EPS: $0.33, exceeding guidance [1] - Revised full-year net sales forecast: $6.33 billion to $6.41 billion [1] Market Dynamics - Growth observed in North America and global markets, with both Victoria's Secret and PINK brands showing comparable sales growth [1] - Notable growth in July and August, attributed to product innovation and continuous new launches [1] - Strong connection established with both new and existing consumers through effective brand storytelling [1]

Core Insights - Victoria's Secret reported revenue of $1.46 billion for the quarter ended July 2025, marking a year-over-year increase of 3% and a surprise of +3.78% over the Zacks Consensus Estimate of $1.41 billion [1] - The company's EPS for the same period was $0.33, down from $0.40 a year ago, but exceeded the consensus estimate of $0.13 by +153.85% [1] Financial Performance - Comparable sales for stores and direct channels increased by 4%, significantly outperforming the estimated -0.4% by analysts [4] - The total number of company-operated stores was 787, slightly below the average estimate of 793 from two analysts [4] - The total number of stores in the China joint venture was 63, compared to the estimated 70 by two analysts [4] - Geographic net sales for direct channels were reported at $406.5 million, which is lower than the average estimate of $415.58 million, reflecting a year-over-year decline of -5.5% [4] Stock Performance - Over the past month, shares of Victoria's Secret have returned +16.7%, outperforming the Zacks S&P 500 composite's +1.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Net sales increased by 3% year over year to $1,459 million, with comparable sales growing by 4%, reflecting sequential improvements over the prior quarter [35][36] - Adjusted operating income reached $55 million, exceeding the high end of guidance by $20 million, despite a $14 million impact from a security incident [35][36] - Gross margins improved to 35.6%, up 20 basis points year over year and 60 basis points above guidance, driven by lower discounting and stronger regular price selling [10][40] Business Line Data and Key Metrics Changes - Victoria's Secret and PINK both saw comparable sales growth, with PINK experiencing double-digit increases in apparel and a significant improvement in new customer acquisition [20][36] - The beauty segment continued to perform well, with sales up mid-single digits, marking the eighth consecutive quarter of growth [21][37] - Bra sales in North America were down low single digits, but showed sequential improvement over Q1, with market share growing by approximately 0.5% in total bras [12][36] Market Data and Key Metrics Changes - International sales grew by 22% year over year, with retail comps up high single digits, particularly strong in China driven by digital channels [9][38] - The 18 to 24 age group was identified as a strong customer growth segment, contributing to improved customer acquisition [24][25] Company Strategy and Development Direction - The company is focused on its "Path to Potential" strategy, emphasizing product innovation, brand strength, and customer experience to drive long-term growth [5][34] - Plans to enhance the PINK brand with a digital and social-first approach, aiming to reconnect with younger consumers [15][16] - The upcoming Victoria's Secret Fashion Show is expected to be a key brand moment, aimed at driving traffic and customer acquisition [27][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a complex macro environment while continuing to invest in brand building and innovative marketing [26][53] - The company anticipates continued momentum into the third quarter, with a forecast for net sales between $1,390 million and $1,420 million [50] - Despite challenges from tariffs, the company is maintaining its adjusted operating income guidance for the year [46][47] Other Important Information - The company is committed to optimizing inventory levels and improving production lead times to enhance operational efficiency [11][102] - A focus on strategic pricing and promotional strategies is being implemented to mitigate tariff impacts while maintaining customer value [71][104] Q&A Session Summary Question: Implications of the end of the de minimis exemption on the industry - Management indicated that the de minimis exemption is not a significant factor for the business, as e-commerce distribution centers are primarily located in Columbus [56] Question: Insights on innovation and future plans - Management highlighted a deep pipeline of innovation focused on bras and sports, with a more frequent release of new products planned for the back half of the year [62][65] Question: Gross margin strategy and Store of the Future performance - Management discussed a conscious effort to reduce promotions and focus on regular price sales, with positive results from Store of the Future remodels showing double-digit sales lifts [71][72] Question: Performance of international business and category strengths - Management noted that the intimates business is strong internationally, with beauty and intimates being the core categories performing well globally [75][76] Question: Details on the upcoming fashion show and marketing investments - Management confirmed that the fashion show will focus on the Victoria's Secret brand, with marketing spend remaining flat year over year [81][83] Question: Inventory planning and pricing power - Management acknowledged the need for better inventory optimization and indicated that pricing power exists, particularly in gifting and beauty categories [101][104]

Financial Data and Key Metrics Changes - Net sales increased by 3% year over year to $1,459 million, with comparable sales growing by 4% despite a digital outage in May that negatively impacted sales by approximately $20 million [7][36][40] - Adjusted gross margin rate improved to 35.6%, up 20 basis points from last year and 60 basis points above guidance, driven by lower discounting and stronger regular price selling [10][41][42] - Adjusted operating income reached $55 million, exceeding guidance by $20 million, and adjusted net income per diluted share was $0.33, significantly above the high end of guidance [11][37] Business Line Data and Key Metrics Changes - Victoria's Secret and PINK both saw comparable sales growth, with PINK experiencing double-digit increases in apparel and a healthier quality of sales [20][39] - Beauty sales grew mid-single digits, marking the eighth consecutive quarter of growth, with strong performance across body care and seasonal fragrance categories [21][39] - International sales grew by 22% year over year, with retail comparable sales up in high single digits, particularly strong in China [8][40] Market Data and Key Metrics Changes - The company gained market share in bras, with an approximate 0.5% increase in total bras and nearly a full point in traditional bras [12] - The 18 to 44 age group showed strong customer growth, indicating effective marketing strategies targeting this demographic [24][87] Company Strategy and Development Direction - The company is focused on its "Path to Potential" strategy, emphasizing product innovation, brand strength, and customer experience to drive long-term growth [5][35] - Plans include enhancing the PINK brand's appeal to younger consumers and expanding the beauty category, which is significantly larger than the intimates market [15][21] - The upcoming Victoria's Secret Fashion Show is expected to be a key brand moment, aimed at driving customer engagement and sales momentum [28][79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a complex macro environment while continuing to invest in brand building and innovative marketing [26][54] - The company anticipates continued momentum into the third quarter, with a forecast for net sales between $1,390 million and $1,420 million [51] - Despite challenges from tariffs, the company is maintaining its adjusted operating income guidance for the year, reflecting strong business momentum [48] Other Important Information - The company is committed to optimizing inventory levels and enhancing the customer experience through strategic pricing and promotional strategies [10][100] - The successful launch of the Body by Victoria collection is seen as a significant driver of customer engagement and sales growth [9][39] Q&A Session Summary Question: Implications of the end of the de minimis exemption on the industry - Management indicated that the de minimis exemption is not a significant factor for their e-commerce distribution strategy [56][57] Question: Insights on innovation and plans for the back half of the year - Management highlighted a strong pipeline of innovation focused on bras and sports, with a more frequent release schedule planned [61][63] Question: Gross margin strategy and Store of the Future performance - Management discussed a conscious effort to reduce promotions and improve regular price sales, with positive results from Store of the Future remodels [69][70] Question: Performance of international business and go-to-market strategy - Management confirmed strong performance in beauty and intimates internationally, with no significant differences in marketing strategies compared to domestic [74][76] Question: Details on the upcoming fashion show and marketing investments - Management confirmed that the fashion show will focus on the Victoria's Secret brand, with marketing investments remaining flat year over year [79][81] Question: Inventory planning and pricing power - Management acknowledged the need for better inventory optimization and indicated that pricing power exists, particularly in gifting and beauty categories [96][101]

Core Viewpoint - Victoria's Secret reported quarterly earnings of $0.33 per share, significantly exceeding the Zacks Consensus Estimate of $0.13 per share, representing an earnings surprise of +153.85% [1][2] Financial Performance - The company posted revenues of $1.46 billion for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 3.78% and showing an increase from $1.42 billion year-over-year [2] - Over the last four quarters, Victoria's Secret has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance and Outlook - Victoria's Secret shares have declined approximately 45% since the beginning of the year, contrasting with the S&P 500's gain of 10.2% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.58 on revenues of $1.35 billion, while for the current fiscal year, it is $2.01 on revenues of $6.24 billion [7] Industry Context - The Retail - Apparel and Shoes industry, to which Victoria's Secret belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Victoria's Secret's stock performance [5][6]

Financial Performance (Q2 2025) - Net sales increased by 3% to $14591 million compared to $14172 million in 2024[7] - Comparable store sales increased by 4% compared to a decrease of 5% in 2024[7] - Gross profit increased by 4% to $5194 million from $5014 million in 2024[7] - Operating income decreased by 12% to $551 million from $623 million in 2024[7] - Net income attributable to Victoria's Secret & Co decreased by 15% to $269 million from $315 million in 2024[7] - Net income per diluted share attributable to Victoria's Secret & Co decreased by 18% to $033 from $040 in 2024[7] Financial Performance (First Half 2025) - Net sales increased by 1% to $28121 million compared to $27766 million in 2024[9] - Comparable store sales increased by 2% compared to a decrease of 6% in 2024[9] - Operating income decreased by 15% to $868 million from $1019 million in 2024[9] - Net income attributable to Victoria's Secret & Co decreased by 16% to $341 million from $406 million in 2024[9] 2025 Outlook - The company projects net sales of approximately $633 billion to $641 billion for the full year[13]

[Executive Summary](index=1&type=section&id=Executive%20Summary) This section highlights Victoria's Secret & Co.'s strong Q2 2025 performance, exceeding expectations in sales, operating income, and EPS, driven by comparable sales growth [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) Victoria's Secret & Co. reported strong second-quarter 2025 results, exceeding sales, operating income, and EPS expectations. The company achieved a 4% increase in comparable sales across Victoria's Secret and PINK brands, both in North America and globally, and across store and online channels - Second quarter sales, operating income, and EPS exceeded expectations[1](index=1&type=chunk) - Second quarter comparable sales increased by **4%**[1](index=1&type=chunk)[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Hillary Super highlighted continued momentum, disciplined execution, and the strength of evolving brands, attributing success to product innovation and evolved storytelling. CFO Scott Sekella noted gross margin rate expansion despite tariff headwinds, driven by inventory management and promotional strategy. The refreshed leadership team's impact was evident in sharper execution and reenergized culture - Momentum continued with results beating sales and operating income guidance, driven by disciplined execution and the power of evolving Victoria's Secret and PINK brands[3](index=3&type=chunk) - Gross margin rate expanded in the quarter despite tariff headwinds, supported by disciplined inventory management and an evolving promotional approach[4](index=4&type=chunk) - The first full quarter under the refreshed leadership team showed sharper execution, reenergized culture, and high-emotion storytelling, delivering significant momentum[4](index=4&type=chunk) [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) This section details Victoria's Secret & Co.'s financial performance for Q2 2025, covering both GAAP and adjusted metrics [GAAP Financial Performance](index=1&type=section&id=GAAP%20Financial%20Performance) For the second quarter of 2025, Victoria's Secret & Co. reported a 3% increase in net sales to $1.459 billion. However, operating income decreased to $41 million from $62 million in Q2 2024, and net income attributable to Victoria's Secret & Co. fell to $16 million, or $0.20 per diluted share, from $32 million, or $0.40 per diluted share, in the prior year Second Quarter GAAP Financial Performance (2025 vs. 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :----------------------------------- | :----------------- | :----------------- | :--------- | | Net Sales | $1,459.1 | $1,417.2 | 3.0% | | Operating Income | $41.0 | $62.3 | (34.3%) | | Net Income Attributable to VS&Co | $16.2 | $31.8 | (49.0%) | | Net Income Per Diluted Share | $0.20 | $0.40 | (50.0%) | [Adjusted Financial Performance](index=2&type=section&id=Adjusted%20Financial%20Performance) Adjusted operating income for Q2 2025 was $55 million, exceeding the guidance range of $15 million to $35 million, though it was lower than $62 million in Q2 2024. Adjusted net income per diluted share was $0.33, also above the guidance range of $0.00 to $0.15, compared to $0.40 in Q2 2024 Second Quarter Adjusted Financial Performance (2025 vs. 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Guidance Range (Q2 2025) | | :----------------------------------- | :----------------- | :----------------- | :----------------------- | | Adjusted Operating Income | $55 | $62 | $15 - $35 | | Adjusted Net Income Per Diluted Share | $0.33 | $0.40 | $0.00 - $0.15 | [Full Year and Third Quarter 2025 Outlook](index=2&type=section&id=Full%20Year%20and%20Third%20Quarter%202025%20Outlook) This section provides Victoria's Secret & Co.'s financial guidance for the full year and the upcoming third quarter of 2025 [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) The company raised its full-year net sales outlook to a range of $6.330 billion to $6.410 billion, up from the prior guidance of $6.2 billion to $6.3 billion. The full-year adjusted operating income outlook was reiterated at $270 million to $320 million, which now includes an updated estimated net tariff impact of approximately $100 million, $50 million higher than previous estimates Full Year 2025 Guidance Update | Metric | New Guidance | Prior Guidance | | :-------------------------- | :--------------------- | :--------------------- | | Net Sales | $6.330B - $6.410B | $6.2B - $6.3B | | Adjusted Operating Income | $270M - $320M | $270M - $320M | - The full-year outlook includes an updated estimated net tariff impact of approximately **$100 million**, which is **$50 million higher** than the previous estimate[8](index=8&type=chunk) [Third Quarter 2025 Guidance](index=2&type=section&id=Third%20Quarter%202025%20Guidance) For the third quarter of 2025, Victoria's Secret & Co. forecasts net sales in the range of $1.390 billion to $1.420 billion, compared to $1.347 billion in the prior year's third quarter. The company expects an adjusted operating loss of $35 million to $55 million and an adjusted net loss per share of $0.55 to $0.75 for the quarter Third Quarter 2025 Guidance | Metric | Q3 2025 Forecast | Q3 2024 Actual | | :-------------------------- | :--------------------- | :--------------------- | | Net Sales | $1.390B - $1.420B | $1.347B | | Adjusted Operating Loss | $35M - $55M | N/A | | Adjusted Net Loss Per Share | $0.55 - $0.75 | N/A | [Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of Victoria's Secret & Co., its brands, product offerings, and global operational footprint [About Victoria's Secret & Co.](index=3&type=section&id=About%20Victoria's%20Secret%20%26%20Co.) Victoria's Secret & Co. is a specialty retailer offering fashion-inspired collections including lingerie, apparel, fragrances, and body care. It comprises market-leading brands Victoria's Secret and PINK, and the technology-led intimates brand Adore Me. The company operates approximately 1,380 retail stores in nearly 70 countries with over 30,000 associates - Victoria's Secret & Co. is a specialty retailer of modern, fashion-inspired collections including bras, panties, lingerie, apparel, sleepwear, swim, lounge, sport, fragrances, and body care[12](index=12&type=chunk) - The company is comprised of market-leading brands Victoria's Secret and PINK, and Adore Me, a technology-led, digital-first innovative intimates brand[12](index=12&type=chunk) - Global footprint includes approximately **1,380 retail stores** in nearly **70 countries** and over **30,000 associates**[12](index=12&type=chunk) [Supplemental Financial Data and Reconciliations](index=5&type=section&id=Supplemental%20Financial%20Data%20and%20Reconciliations) This section provides detailed breakdowns of net sales by channel, comparable sales performance, store count, and GAAP/non-GAAP financial reconciliations [Net Sales Breakdown by Channel](index=5&type=section&id=Total%20Net%20Sales%20%28Millions%29) For Q2 2025, North America Stores sales increased by 3.1% to $824.8 million, while Direct sales decreased by 5.5% to $406.5 million. International sales saw significant growth of 21.8% to $227.8 million. Year-to-date, total net sales increased by 1.3% to $2,812.1 million Total Net Sales by Channel (Millions) | Channel | Q2 2025 | Q2 2024 | % Inc/(Dec) | YTD 2025 | YTD 2024 | % Inc/(Dec) | | :------------------- | :-------- | :-------- | :---------- | :--------- | :--------- | :---------- | | Stores - North America | $824.8 | $800.0 | 3.1% | $1,546.1 | $1,529.1 | 1.1% | | Direct | $406.5 | $430.2 | (5.5%) | $839.7 | $879.0 | (4.5%) | | International | $227.8 | $187.0 | 21.8% | $426.3 | $368.5 | 15.7% | | **Total** | **$1,459.1** | **$1,417.2** | **3.0%** | **$2,812.1** | **$2,776.6** | **1.3%** | [Comparable Sales Performance](index=5&type=section&id=Comparable%20Sales%20Increase%20%28Decrease%29) Total comparable sales (Stores and Direct) increased by 4% in Q2 2025, a significant improvement from a 3% decrease in Q2 2024. Stores Only comparable sales also rose by 4% in Q2 2025, compared to a 5% decrease in the prior year. Year-to-date, comparable sales for Stores and Direct increased by 1%, and Stores Only by 2% Comparable Sales Increase (Decrease) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------ | :------ | :------ | :------- | :------- | | Stores and Direct | 4% | (3%) | 1% | (4%) | | Stores Only | 4% | (5%) | 2% | (6%) | [Total Store Count](index=5&type=section&id=Total%20Stores) As of August 2, 2025, the total number of stores was 1,376, a slight decrease from 1,387 at February 1, 2025. During the quarter, 41 stores were opened and 52 were closed. Company-operated stores decreased from 806 to 787, while partner-operated stores increased from 505 to 521 Total Store Count (as of August 2, 2025) | Category | Stores at 2/1/25 | Opened | Closed | Stores at 8/2/25 | | :---------------------- | :--------------- | :----- | :----- | :--------------- | | Company-Operated | 806 | 6 | (25) | 787 | | China Joint Venture | 70 | — | (7) | 63 | | Partner-Operated | 505 | 35 | (19) | 521 | | Adore Me | 6 | — | (1) | 5 | | **Total** | **1,387** | **41** | **(52)** | **1,376** | [Consolidated Statements of Income (GAAP)](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The consolidated statements of income provide detailed GAAP financial results for the thirteen and twenty-six weeks ended August 2, 2025, and August 3, 2024, showing net sales, gross profit, operating income, and net income Consolidated Statements of Income (GAAP) - Thirteen Weeks Ended (in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :--------- | :--------- | | Net Sales | $1,459,137 | $1,417,193 | | Costs of Goods Sold, Buying and Occupancy | (940,121) | (915,827) | | Gross Profit | 519,016 | 501,366 | | General, Administrative and Store Operating Expenses | (478,057) | (439,042) | | Operating Income | 40,959 | 62,324 | | Interest Expense | (17,804) | (21,363) | | Other Income | 1,121 | 465 | | Income Before Income Taxes | 24,276 | 41,426 | | Provision for Income Taxes | 6,249 | 9,285 | | Net Income | 18,027 | 32,141 | | Less: Net Income Attributable to Noncontrolling Interest | 1,799 | 340 | | Net Income Attributable to Victoria's Secret & Co. | $16,228 | $31,801 | | Net Income Per Diluted Share Attributable to Victoria's Secret & Co. | $0.20 | $0.40 | | Weighted Average Shares Outstanding | 82,205 | 79,595 | Consolidated Statements of Income (GAAP) - Twenty-Six Weeks Ended (in thousands) | Metric | 2025 | 2024 | | :------------------------------------------ | :--------- | :--------- | | Net Sales | $2,812,086 | $2,776,635 | | Costs of Goods Sold, Buying and Occupancy | (1,818,844) | (1,773,954) | | Gross Profit | 993,242 | 1,002,681 | | General, Administrative and Store Operating Expenses | (932,497) | (914,089) | | Operating Income | 60,745 | 88,592 | | Interest Expense | (34,893) | (43,099) | | Other Income | 4,078 | 794 | | Income Before Income Taxes | 29,930 | 46,287 | | Provision for Income Taxes | 9,128 | 16,630 | | Net Income | 20,802 | 29,657 | | Less: Net Income Attributable to Noncontrolling Interest | 6,230 | 1,498 | | Net Income Attributable to Victoria's Secret & Co. | $14,572 | $28,159 | | Net Income Per Diluted Share Attributable to Victoria's Secret & Co. | $0.18 | $0.35 | | Weighted Average Shares Outstanding | 82,085 | 79,330 | [Non-GAAP Financial Information and Reconciliation](index=8&type=section&id=NON-GAAP%20FINANCIAL%20INFORMATION) The company provides non-GAAP financial measures to present adjusted operating income, net income, and diluted EPS, excluding certain non-recurring or unusual items like intangible asset amortization, restructuring charges, and Adore Me acquisition-related items, to offer a clearer view of ongoing operations - Non-GAAP financial measures are used to present adjusted operating income, net income, and diluted EPS, excluding non-recurring, infrequent, or unusual items not indicative of ongoing operations[24](index=24&type=chunk) Reconciliation of Reported to Adjusted Financial Measures (Q2 & YTD, in thousands) | Metric | Q2 2025 (GAAP) | Q2 2025 (Adj.) | Q2 2024 (GAAP) | Q2 2024 (Adj.) | YTD 2025 (GAAP) | YTD 2025 (Adj.) | YTD 2024 (GAAP) | YTD 2024 (Adj.) | | :---------------------------------------------------------------- | :------------- | :------------- | :------------- | :------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Reported Operating Income | $40,959 | $55,124 | $62,324 | $62,265 | $60,745 | $86,791 | $88,592 | $101,870 | | Reported Net Income Attributable to VS&Co | $16,228 | $26,883 | $31,801 | $31,462 | $14,572 | $34,097 | $28,159 | $40,567 | | Reported Net Income Per Diluted Share Attributable to VS&Co | $0.20 | $0.33 | $0.40 | $0.40 | $0.18 | $0.42 | $0.35 | $0.51 | - Adjustments include amortization of intangible assets, restructuring and other one-time charges, and Adore Me acquisition-related items[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [Legal and Investor Information](index=2&type=section&id=Legal%20and%20Investor%20Information) This section provides details on the upcoming earnings conference call and important disclosures regarding forward-looking statements and risk factors [Quarterly Earnings Conference Call](index=2&type=section&id=Quarterly%20Earnings%20Conference%20Call) Victoria's Secret & Co. will host its second-quarter earnings call on Thursday, August 28, 2025, at 8:30 a.m. Eastern. Dial-in and replay information, along with website access for materials, are provided - Earnings call scheduled for **Thursday, August 28, 2025, at 8:30 a.m. Eastern**[11](index=11&type=chunk) - Dial-in: **1-800-619-9066** (international: **1-212-519-0836**), passcode **5358727**. Audio replay: **1-800-839-2204** (international: **1-203-369-3032**), passcode **2485654**[11](index=11&type=chunk) - Materials available on the Investors section of www.victoriassecretandco.com[11](index=11&type=chunk) [Safe Harbor Statement and Risk Factors](index=3&type=section&id=Safe%20Harbor%20Statement%20Under%20the%20Private%20Securities%20Litigation%20Reform%20Act%20of%201995) The Safe Harbor Statement cautions that forward-looking statements involve risks and uncertainties, and actual results may differ materially. It lists various factors that could affect operations and financial performance, including general economic conditions, market disruptions, trade environment uncertainty, strategic plan implementation, leadership changes, labor costs, store traffic, international operations, brand reputation, competition, consumer acceptance, acquisitions, AI integration, supply chain issues, geographic concentration, vendor performance, costs, IT security, stock price volatility, shareholder activism, credit rating, and regulatory/legal matters - Forward-looking statements are subject to change based on various factors beyond the company's control, and future performance may differ materially from expectations[13](index=13&type=chunk) - Key risk factors include general economic conditions, market disruptions, global trade environment uncertainty (tariffs), ability to implement strategic plans, leadership changes, labor costs, store traffic, international expansion, brand reputation, competitive landscape, consumer acceptance, successful integration of acquisitions, and the ability to incorporate AI[13](index=13&type=chunk)[15](index=15&type=chunk) - Additional risks relate to supply chain (political instability, natural disasters, shipping disruptions, currency fluctuations, labor disputes), geographic concentration of facilities, vendor performance, freight/product/energy costs, IT systems and cybersecurity, data security, stock price volatility, shareholder activism, credit rating, and regulatory/legal compliance[15](index=15&type=chunk)

Core Insights - The company reported strong second quarter results, with net sales of $1.459 billion, a 3% increase from $1.417 billion in the same quarter of 2024, exceeding previous guidance [5][6] - Comparable sales for the second quarter increased by 4%, indicating growth in both Victoria's Secret and PINK brands across various channels [3][5] - The company raised its full-year 2025 sales guidance to a range of $6.330 billion to $6.410 billion, up from the previous range of $6.2 billion to $6.3 billion [8] Financial Performance - Operating income for the second quarter was reported at $41 million, down from $62 million in the same quarter of 2024 [6][23] - Adjusted operating income for the second quarter was $55 million, surpassing the guidance range of $15 million to $35 million, although it was lower than last year's adjusted operating income of $62 million [7][29] - Net income for the second quarter was $16 million, or $0.20 per diluted share, compared to $32 million, or $0.40 per diluted share, in the same quarter of 2024 [6][23] Sales Breakdown - North American store sales increased by 3.1% to $824.8 million, while direct sales decreased by 5.5% to $406.5 million [16] - International sales saw a significant increase of 21.8%, reaching $227.8 million [16] - Year-to-date total net sales reached $2.812 billion, a 1.3% increase from $2.776 billion in the previous year [16] Future Outlook - The company expects third quarter net sales to be in the range of $1.390 billion to $1.420 billion, compared to $1.347 billion in the same quarter of 2024 [9] - Adjusted operating loss for the third quarter is anticipated to be between $35 million and $55 million, with an estimated adjusted net loss per share ranging from $0.55 to $0.75 [9] - The company has updated its estimated net tariff impact for fiscal year 2025 to approximately $100 million, which is $50 million higher than previously estimated [8]