Financial Data and Key Metrics Changes - The company reported net sales of $1.47 billion, an increase of 9% year-over-year, with adjusted gross margin expansion of 170 basis points and earnings growth of 45% [8][27][32] - Adjusted operating income for the third quarter was break-even, better than the guidance of an adjusted operating loss of $35 million-$55 million [33][34] - Adjusted net loss per share was $0.27, significantly better than the guidance of $0.55-$0.75 [34] Business Line Data and Key Metrics Changes - The intimates business returned to growth, up mid-single digits, gaining over 1% share in the U.S. intimates market [6][15] - PINK achieved double-digit sales growth, with a notable increase in customer acquisition and engagement [17][19] - The Beauty segment grew low single digits, building on last year's mid-teens increase [20][30] Market Data and Key Metrics Changes - The international business saw sales grow over 30%, driven by exceptional performance in China, particularly in the digital channel [8][30] - The U.S. intimates market declined, yet the company grew its market share by over 1% [24][30] Company Strategy and Development Direction - The company is advancing its "Path to Potential" strategy, focusing on four pillars: Supercharging Bra Authority, Recommitting to PINK, Fueling Growth in Beauty, and Evolving Brand Projection [5][25] - The strategy aims to enhance brand distinctiveness and unlock greater value across the ecosystem to drive sustained shareholder returns [5][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the strategy and deliver a strong finish to fiscal 2025, despite being cautious about potential consumer pullback post-holiday [45][37] - The company raised its full-year outlook for net sales to $6.45 billion-$6.48 billion, reflecting strong momentum into the fourth quarter [36][37] Other Important Information - The Victoria's Secret fashion show significantly impacted brand engagement, resulting in increased customer acquisition and social media impressions [10][11] - The company is focusing on reducing promotions while enhancing regular price selling, which has contributed to gross margin expansion [51][70] Q&A Session Summary Question: How is the company maintaining momentum post-fashion show? - Management noted strong traffic and engagement, particularly in stores and internationally, driven by bras and glamour products [48] Question: Can you elaborate on strategies to pull back on promotions? - The company is successfully using gifts with purchase (GWPs) to provide value while reducing promotions, contributing positively to gross margin [51] Question: What is the profile of new customers being acquired? - New customer acquisition is focused on the 18-24 age group, with higher average order values, indicating quality engagement rather than price-driven purchases [58] Question: What is the outlook for operating margins? - Management believes a low double-digit operating margin is achievable over the next couple of years, supported by growth and disciplined expense management [60][61] Question: What is in the pipeline for bra launches in 2026? - The company has several bra launches planned for 2026, building on successful marketing strategies and customer engagement [66]

Financial Data and Key Metrics Changes - The company reported net sales of $1.47 billion, an increase of 9% year-over-year, with adjusted gross margin expansion of 170 basis points and earnings growth of 45% [6][27][32] - Adjusted operating income for the third quarter was break-even, better than the guidance of an adjusted operating loss of $35 million to $55 million [33][34] - Adjusted net loss per share was $0.27, significantly better than the guidance of $0.55 to $0.75 [34] Business Line Data and Key Metrics Changes - The intimates business returned to growth, up mid-single digits, gaining over 1% share in the U.S. intimates market [5][14] - PINK achieved low double-digit sales growth, marking a significant recovery [17][30] - The beauty business grew low single digits, building on last year's mid-teens increase [20][30] Market Data and Key Metrics Changes - International retail sales grew over 30% during the quarter, driven by exceptional performance in China, particularly in the digital channel [6][31] - The company gained market share in the U.S. intimates market despite an overall market decline [25][62] Company Strategy and Development Direction - The company is focused on four strategic pillars: supercharging bra authority, recommitting to PINK, fueling growth in beauty, and evolving brand projection and go-to-market strategy [4][12][19] - The Path to Potential strategy aims to create a powerful multiplier effect, unlocking greater value across the ecosystem [4][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute the strategy and deliver a strong holiday season, despite being cautious about potential consumer pullback post-holiday [25][45] - The company raised its full-year outlook for net sales to a range of $6.45 billion to $6.48 billion, reflecting strong momentum [35][36] Other Important Information - The Victoria's Secret fashion show significantly boosted brand engagement, resulting in nearly 9 million new social followers and 51 billion total media impressions [9][10] - The company is investing in talent to scale its beauty business and enhance its innovation pipeline [20][21] Q&A Session Summary Question: How is the company maintaining momentum post-fashion show? - Management noted strong traffic and engagement, particularly in stores, and emphasized the importance of the Path to Potential initiatives [46][47] Question: Can you elaborate on strategies to reduce promotions? - The company is pulling back on promotions while utilizing gifts with purchase (GWPs) to maintain customer value, contributing positively to gross margin [49] Question: What is the profile of new customers being acquired? - New customer acquisition is focused on the 18-24 age group, with a noted increase in higher average order values [51][52] Question: What is the outlook for operating margins? - Management believes a low double-digit operating margin is achievable over the next couple of years, supported by growth and disciplined expense management [53] Question: What is the cadence of monthly comps in Q3? - Strong performance was noted throughout Q3, with significant amplification in October due to the fashion show, sustaining momentum into November [60][61]