Victoria's Secret & Co.

Q2 net sales were $1.611 billion, up $152 million or 10% year over year. Comp sales increased 9% (13% on a 2-year basis). Adjusted gross margin dollars were $626 million, up $106 million or 20%, and adjusted gross margin rate was 38.8% versus 35.6% last year. Adjusted SG&A was $502 million, with SG&A rate at 31.1% versus 31.8% last year. Adjusted operating income was $124 million, up 105% from $55 million, and adjusted EPS was $0.95 versus $0.33 a year ago. Q2 inventories were up 8% year over year, and cash ended at $522 million with no ABL borrowings. For the full year, management raised guidance to net sales of $7.1 billion-$7.18 billion, adjusted operating income of $560 million-$590 million, and adjusted EPS of $4.45-$4.70. For Q3, they guided to net sales of $1.57 billion-$1.6 billion, adjusted operating income of $10 million-$20 million, gross margin around 38%, SG&A rate around 37.5%, and EPS of a loss of $0.09 to income of $0.01.

Hillary Super said the quarter validated the company’s “Path to Potential” strategy, emphasizing that the business is winning more customers, taking share, and improving brand relevance across Victoria’s Secret, PINK, and beauty. She highlighted bras as the foundation of growth, PINK’s clearer identity, beauty’s stronger integration with the broader brand, and international expansion, while stressing that the company is not done and still sees “tremendous runway ahead.” Her tone was confident and constructive, with repeated emphasis on innovation, storytelling, and faster execution.

Scott Sekella said the quarter outperformed guidance across the board, helped by strong North America and international results, better regular-price selling, and disciplined inventory. He noted gross margin expansion came from higher merchandise margin and leverage on buying and occupancy, while SG&A leverage came despite higher North America Flex costs; he also pointed out a roughly $10 million gross tariff headwind, mostly offset by mitigation, and that the company received $140 million of IEPA tariff refunds, excluded from non-GAAP results. He said cash ended at $522 million, there were no ABL borrowings, $100 million of buybacks had been completed year to date, and the company still had $150 million remaining under its authorization. He also said marketing spend is currently in the low 7% of sales range with room to rise to the high single digits over the next couple of years, and that fiscal 2026 capex remains $220 million-$240 million.

Analysts focused on PINK promotions, customer quality, bra innovation, store strategy, marketing spend, semiannual sale, and the slowdown in reported international growth excluding reporting shifts. Management said PINK and the broader company are continuing to pull back on promotions, with regular-price selling driving growth, and said new customers are coming back faster and spending more, not just buying once. On stores, management called the SoHo PINK store a useful laboratory and said it sees selective opportunity to add more standalone PINK locations, while also reaffirming stores as important for bra fitting and service. On international, management said the apparent deceleration was mostly due to timing of low-margin franchise sales, and said China remains the top international growth market, led by digital and improving store comps.