Victoria's Secret reported a significant sales increase in its latest quarter, driven by stronger demand and a strategic reduction in promotional markdowns. The stock surged more than 12% in after-hours trading, reflecting renewed investor confidence in the brand’s turnaround strategy.
- Comparable store sales rose 8% YoY, beating estimates
- Promotional markdowns decreased by ~30% compared to Q4 2024
- Total revenue reached $1.12 billion, up 6% YoY
- Adjusted EPS hit $0.47, exceeding consensus by $0.09
- VSCO shares surged over 12% in after-hours trading
- Strategic shift toward reduced discounting signals margin improvement
Victoria's Secret posted robust financial results for the fourth quarter, with comparable store sales rising 8% year-over-year, surpassing analyst forecasts. This growth was fueled by improved customer traffic and higher average transaction values, indicating stronger pricing power. Management highlighted a deliberate shift away from heavy discounting, reducing promotional activity by approximately 30% compared to the same period last year, which helped improve gross margins. The company reported total revenue of $1.12 billion for the quarter, up 6% from the prior-year period, and adjusted earnings per share reached $0.47, exceeding expectations by $0.09. These figures underscore progress in rebuilding brand value and operational efficiency. The focus on premium product offerings and enhanced digital engagement contributed significantly to the performance. Investors responded swiftly, sending VSCO shares up over 12% in extended trading. Analysts noted that the decline in discounting is a particularly positive sign, suggesting potential long-term sustainability in margin expansion. The move away from deep promotions could signal a broader industry trend toward brand equity recovery in the apparel sector. Retail investors and institutional holders alike are now reassessing Victoria's Secret’s prospects, with several brokerages upgrading their ratings. The stock’s rebound follows years of underperformance amid shifting consumer preferences and intense competition in the intimate apparel market.