VSCO Raises Full-Year Guidance After Third Quarter Outperformance
Victoria’s Secret & Co. (NYSE: VSCO) posted third quarter 2025 results that not only surpassed analyst expectations, but also showcased notable momentum across core segments. Net sales rose 9.2% year over year to $1.47 billion, handily exceeding the upper end of the company’s own guidance. Adjusted operating results outpaced prior forecasts, driven by disciplined cost management, stronger gross margins, and sustained demand across brands and regions.
International and Store Sales Stand Out, Driving Company-Wide Growth
One of the key stories this quarter: International sales surged 33.5% from the prior year, marking VSCO’s highest growth region and reflecting strong brand momentum overseas. North American store sales were up 5.4%, while direct (online) sales gained 4.3%. Altogether, these results delivered an 8% increase in total comparable sales for the quarter—a sharp acceleration from 3% a year earlier.
| Channel | Q3 2025 Net Sales ($M) | Q3 2024 Net Sales ($M) | % Change |
|---|---|---|---|
| Stores – North America | 778.2 | 738.1 | 5.4% |
| Direct (Online) | 428.5 | 411.0 | 4.3% |
| International | 264.8 | 198.3 | 33.5% |
| Total | 1,471.5 | 1,347.4 | 9.2% |
Improving Margins and Narrowing Losses Highlight Financial Discipline
The company turned in an adjusted operating result of break-even (compared to guidance for a $35–55 million loss), and net loss per share of $0.27—substantially better than its projected $0.55 to $0.75 range. Reported net loss for the quarter narrowed to $37 million, compared to $56 million last year. Management attributed the margin gains to less promotional activity, higher full-price selling, and ongoing cost controls.
| Metric | Q3 2025 | Q3 2024 | Change |
|---|---|---|---|
| Gross Margin (%) | 36.4% | 34.7% | +1.7 pts |
| Net Loss ($M) | 37.3 | 56.2 | Lower Loss |
| Adjusted Net Loss Per Share | 0.27 | 0.50 | Improved |
| Comparable Sales Growth | 8% | 3% | +5 pts |
Guidance Raised Across the Board: What’s Driving Confidence?
VSCO’s management hiked its full-year forecast, now expecting:
- Net sales between $6.45 billion and $6.48 billion (previously $6.33–$6.41 billion)
- Adjusted operating income of $350–375 million (up from $270–$320 million)
- Adjusted net income per share of $2.40–$2.65 (prior: $1.80–$2.20)
The upgraded guidance reflects a solid holiday start, broad-based strength across product categories, and confidence in cost controls and execution. Notably, fourth quarter sales are also expected to increase year over year.
| Full Year 2025 (Adjusted) | New Outlook | Prior Guidance |
|---|---|---|
| Net Sales ($B) | 6.45–6.48 | 6.33–6.41 |
| Operating Income ($M) | 350–375 | 270–320 |
| Net Income Per Share ($) | 2.40–2.65 | 1.80–2.20 |
Store Footprint: Strategic Adjustments Support Expansion Abroad
At quarter-end, VSCO operated 1,404 retail locations, including steady expansion via partner-operated stores and international joint ventures, particularly in Asia. In North America, store optimization efforts continue, with select closures offset by new strategic openings.
Takeaway: What This Means for Investors and the Retail Landscape
VSCO’s better-than-expected third quarter, driven by robust international growth and rising store productivity, marks a pivotal moment for the brand. The significant lift in guidance for both the holiday quarter and full year underlines management’s confidence and improved visibility. For investors, key themes to monitor will be the company’s holiday performance, sustained margin expansion, and further international traction—each of which could reinforce or challenge this improving trajectory as fiscal 2025 concludes.
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