Financial Data and Key Metrics Changes - In fiscal 2025, net sales grew 6% to $6.553 billion, with adjusted operating income rising 16% to $403 million and adjusted EPS increasing 22% to $3, despite $85 million in net tariff pressure [32][34] - Q4 net sales were $2.27 billion, an increase of 8% year-over-year, with comp sales also up 8% for the second consecutive quarter [32][33] - Adjusted operating income for Q4 was $316 million, exceeding guidance and up from $299 million in the previous year [37][39] Business Line Data and Key Metrics Changes - The Victoria's Secret brand grew low double digits in Q4, driven by strong performance in bras and sleep categories [14][17] - PINK experienced high single-digit growth in Q4, with increased apparel penetration and renewed momentum in bras [18][19] - The beauty segment grew low single digits in Q4, supported by fine fragrance and mist [24][34] Market Data and Key Metrics Changes - International sales increased 43% year-over-year in Q4, primarily driven by strong performance in China [11][34] - Adjusted gross margin rate for Q4 was 39.4%, slightly down from 39.7% in the previous year, but expanded by 50 basis points when excluding a one-time benefit [35][36] Company Strategy and Development Direction - The company is executing its "Path to Potential" strategy, focusing on four pillars: enhancing bra authority, recommitting to PINK, fueling beauty growth, and evolving brand projection [6][13] - The strategy has led to a return to growth in bras for the first time in four years and significant growth in the PINK brand [6][14] - The company plans to expand its international presence and maximize digital and social commerce opportunities [11][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum entering fiscal 2026, with expectations for continued growth across all business units [28][43] - The company anticipates net sales for fiscal 2026 to be in the range of $6.85 billion to $6.95 billion, representing growth of approximately 5%-6% [44][47] - Management highlighted the importance of maintaining a disciplined approach to expense management and promotional strategies to support margin expansion [45][50] Other Important Information - The company initiated a strategic review of its DailyLook and Adore Me businesses, which are considered non-core assets [41][42] - A non-cash pre-tax impairment charge of $120 million was recorded related to Adore Me's long-lived assets [42] Q&A Session Summary Question: Can you elaborate on new customer acquisition trends? - Management noted growth across new, retained, and reactivated customers, with the highest growth in new customers, particularly among younger demographics [58] Question: What is the momentum seen in Q1 relative to the previous quarter? - Management indicated strong traffic and engagement, particularly around Valentine's Day, setting up for a strong Q1 with a growth outlook of 10%-13% [61][62] Question: How far along is the turnaround for VS and PINK? - Management described the turnaround as being in early to mid-innings, with Victoria's Secret further along than PINK, which is still in a learning phase [75][76] Question: What is the expected impact of tariffs throughout the year? - Management expects the greatest impact from tariffs in Q1, with a gradual easing in the back half of the year as mitigation efforts ramp up [81][82]

Financial Data and Key Metrics Changes - In fiscal 2025, net sales grew 6% to $6.553 billion, with adjusted operating income rising 16% to $403 million and adjusted EPS increasing 22% to $3 despite $85 million in net tariff pressure [29][30] - Fourth quarter net sales were $2.27 billion, an increase of 8% year-over-year, with comp sales also up 8% for the second consecutive quarter [29][30] - Adjusted operating income for the fourth quarter was $316 million, exceeding guidance and up from $299 million in the previous year [35][41] Business Line Data and Key Metrics Changes - The Victoria's Secret brand delivered low double-digit growth in the fourth quarter, with the bra business growing mid-single digits and panties significantly accelerating [13][15] - PINK grew high single digits in the fourth quarter, driven by increased apparel penetration and renewed momentum in bras [17][18] - The beauty segment grew low single digits, with fine fragrance continuing to lead the business [21][32] Market Data and Key Metrics Changes - International net sales increased 43% year-over-year, primarily driven by strong performance in China [11][32] - Adjusting for the shift in reporting European digital sales, international sales grew 27% [32] - The total intimates business across Victoria's Secret and PINK grew at a high single-digit rate, with low single-digit market share gains [31][24] Company Strategy and Development Direction - The company is executing its "Path to Potential" strategy, focusing on four pillars: supercharging bra authority, recommitting to PINK, fueling growth in beauty, and evolving brand projection [6][12] - The strategy aims to restore leadership in bras, reignite PINK, and grow the beauty business, with a clear roadmap and disciplined execution [6][12] - The company plans to expand in existing and new markets, maximizing digital and social commerce opportunities [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum entering fiscal 2026, with expectations for continued top-line growth despite macroeconomic uncertainties [26][49] - The company anticipates net sales for fiscal 2026 to be in the range of $6.85 billion to $6.95 billion, representing growth of approximately 5%-6% [41][42] - Management highlighted the importance of customer acquisition and retention, noting growth across all income cohorts and a positive outlook for younger customers [53][54] Other Important Information - The company initiated a strategic review of its DailyLook and Adore Me businesses, with plans to optimize their roles within the portfolio [38][39] - The company recorded a non-cash pre-tax impairment charge of $120 million related to Adore Me's long-lived assets [39] - The company expects to maintain a disciplined cadence of brand-building moments and product innovation throughout 2026 [25][49] Q&A Session Summary Question: Customer acquisition trends and marketing improvements - Management noted growth in new customer acquisition, particularly among younger demographics, and emphasized ongoing marketing improvements [53][54] Question: Momentum in the first quarter and demand drivers - Management highlighted strong traffic and sales momentum from the holiday season and Valentine's Day, setting a positive outlook for Q1 [56][60] Question: Market share trends and brand potential - Management expressed optimism about market share gains across key categories, particularly in bras and intimates, and indicated significant growth potential for all brands [64][70] Question: Tariff impact throughout the year - Management explained that the first quarter would see the most significant tariff impact, with expectations of mitigation efforts improving in the second half of the year [76][77]

Quarter Earnings March 5, 2026 Fourth Path to Potential Recommit to PINK Evolve Our Brand Projection & GTM Strategy STRATEGIES ENABLERS Fuel Growth in Beauty Supercharge Our Bra Authority 2 Q4 2025 Results - Exceeding Expectations +8% Comparable Sales Broad based outperformance Across Brands, Channels and Geographies 39.4% Adjusted Gross Profit Rate Higher than guidance $518M Ending Cash Balance $316M Adjusted Operating Income, higher than guidance of $265M – $290M $2.77 Adjusted EPS, higher than guidance o ...

Core Insights - Victoria's Secret & Co. reported a strong third quarter for fiscal year 2025, with net sales of $1.472 billion, a 9% increase from $1.347 billion in the same quarter of 2024, exceeding previous guidance [3][7] - The company is raising its full-year outlook for net sales and adjusted operating income, indicating confidence in continued growth and a successful holiday season [6][7] Financial Performance - Net sales for the third quarter of 2025 were $1.472 billion, up 9% from $1.347 billion in Q3 2024, and total comparable sales increased by 8% [3][4] - The operating loss for Q3 2025 was $19 million, an improvement from a loss of $47 million in Q3 2024, while the net loss was $37 million, or $0.46 per diluted share, compared to a net loss of $56 million, or $0.71 per diluted share, in the prior year [4][23] - Adjusted operating income for Q3 2025 was breakeven at $0 million, better than the previously communicated guidance of an adjusted operating loss of $35 million to $55 million [5][27] Outlook - The company raised its full-year net sales forecast to a range of $6.450 billion to $6.480 billion, up from the previous guidance of $6.330 billion to $6.410 billion [6] - For Q4 2025, net sales are expected to be between $2.170 billion and $2.200 billion, compared to $2.106 billion in Q4 2024, with adjusted operating income projected to be between $265 million and $290 million [7][31] Strategic Initiatives - The CEO emphasized the execution of the "Path to Potential" strategy, which focuses on global growth, brand distinctiveness, and enhancing customer experience [2][6] - The company is prioritizing investments in product innovation and brand strength while managing costs effectively [2][4]

Financial Data and Key Metrics Changes - For Q3 fiscal 2025, the company reported sales of $235 million, down from $263.8 million in the prior year, reflecting a decline of 10.5% [15][16] - Adjusted EBITDA was $9.8 million, representing a margin of 4.2%, compared to $19.6 million and a margin of 7.4% a year ago [18] - Net loss for the quarter was $6.4 million, or $0.06 per share, compared to a net loss of $1.2 million, or $0.01 per share last year [18] Business Line Data and Key Metrics Changes - Strong performance was noted in denim, non-denim, dresses, and intimates, all generating positive comparable growth, while tops and jackets categories faced significant challenges [5][6] - Tops accounted for approximately half of the year-over-year sales miss, with a shift towards fashion-forward designs impacting core assortments [5][6] - The footwear category experienced an estimated $12.5 million in lost sales due to a strategic pause, with plans to scale back to historical sales levels of approximately $40 million in 2026 [8][9] Market Data and Key Metrics Changes - Comparable sales declined by 8.3%, with the tariff-related pause in the shoe category contributing approximately 400 basis points to this decline [16] - The company noted that 70% of demand is now originating online, reflecting a shift in consumer preferences towards digital channels [19] Company Strategy and Development Direction - The company is focused on enhancing product offerings through sub-brands and an opening price point strategy to increase market share and customer acquisition [9][10] - A comprehensive review of the spring-summer 2026 buying strategy has been completed, with a commitment to balance investments across categories [7][10] - The store optimization strategy remains a cornerstone of the company's transformation, with plans to close approximately 180 stores in fiscal 2025 [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with overall performance but highlighted corrective actions being taken to address assortment issues [4][5] - The company expects to see sequential improvement in knit and woven performance by the end of Q4, with confidence in returning categories to growth [7][10] - Full-year net sales are now expected in the range of $995 million to $1.002 billion, with Adjusted EBITDA projected between $59 million and $62 million [20] Other Important Information - The company has implemented enhanced guardrails in the merchandising process and is actively addressing near-term assortment gaps [6][7] - Marketing investments increased by $2.7 million to $15.7 million, supporting customer acquisition and brand visibility [17] Q&A Session Summary Question: Can you elaborate on some of the product missteps? - Management identified tops as the primary area of revenue miss, with corrective actions being implemented to address the issue [22][23] Question: What changes are being made to ensure a balanced assortment? - The company is embedding a balanced approach into the assortment architecture, focusing on both opening price points and core products [33][35] Question: What is the outlook for sub-brands? - The sub-brand strategy remains unchanged, with positive momentum expected to continue into 2026 [42][45] Question: How will store closures impact the leverage profile? - Store closures are expected to create a more flexible expense profile, leading to substantial EBITDA margin expansion in 2026 [46][47] Question: What are the competitive landscape observations? - Management noted that the challenges faced were largely self-inflicted, with opportunities to recapture customer interest through improved product offerings [56][57]

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]

Core Viewpoint - Victoria's Secret & Co. is set to release its first quarter 2025 financial results on June 11, 2025, following a delay due to a security incident involving its IT systems [1] Group 1: Earnings Release Information - The earnings release will occur before market open on June 11, 2025, with a live webcast scheduled for 8:30 a.m. ET [1][2] - Financial information will be available on the company's investor relations website approximately one hour prior to the webcast [1] Group 2: Company Overview - Victoria's Secret & Co. is a specialty retailer offering a range of products including bras, lingerie, apparel, and fragrances, with a commitment to empowering over 30,000 associates across approximately 1,380 retail stores in nearly 70 countries [3]