Victoria's Secret & Co.

Net sales were $1.56 billion, up $207 million or 15% year over year. Comp sales increased 13%. Adjusted gross margin dollars were $587 million, up 23%, and adjusted gross margin rate was 37.6% versus 35.2% last year, up 240 basis points. Adjusted SG&A was $507 million, or 32.5% of sales, versus 32.8% last year. Adjusted operating income was $80 million, up 153% from $32 million, and adjusted EPS was $0.60 versus $0.09 last year. For the full year 2026, management raised guidance to net sales of $7.03 billion-$7.13 billion, adjusted operating income of $550 million-$580 million, and adjusted EPS of $4.35-$4.60. For Q2 2026, they guided to sales of $1.59 billion-$1.615 billion, adjusted operating income of $90 million-$100 million, gross margin rate of about 38.5%, and adjusted EPS of $0.65-$0.75.

Hillary Super described the quarter as a broad-based validation of the Path to Potential strategy, saying the company is “in our groove” and that momentum continued across Victoria’s Secret, PINK and Beauty. She emphasized world-building, stronger brand identity, and a “promo detox” that is shifting the business toward emotion-led, regular-price selling rather than promotions. Her tone was upbeat and confident, though she also said the company remains thoughtful about the consumer environment and macro uncertainty.

Scott Sekella focused on the strength of the financial beat and the mechanics behind it. He said adjusted gross margin expanded 240 basis points despite about $14 million of incremental tariff pressure, and noted that higher merchandise margins, buying and occupancy leverage, and better promo discipline drove the improvement. He also detailed liquidity and capital allocation: the company repurchased 2.2 million shares for $100 million, ended with $207 million of cash, and had $15 million outstanding on its ABL, while $150 million remained under the $250 million repurchase authorization.

Analysts pressed on traffic acceleration, the sustainability of promo reduction, and how much room remains for margin expansion. Management said traffic was helped by stronger content and talent, a better media mix, app downloads up over 50%, and word of mouth that was 4x higher than last year. On margins, Scott reiterated that promo reduction is a multiyear journey and said gross margins could again be in the 40s absent tariffs, while also confirming AURs should stay up mid-single digits to low-single digits for the balance of the year. Questions also covered GLP-1s, where Hillary said the impact has been minimal so far, and tariffs, where Scott said the full-year gross tariff headwind is still about $75 million even though net guidance improved.