Why Victoria's Secret Stock Roared Today
Key Points
Victoria's Secret beat earnings this morning.
The lingerie company still lost money, and tariffs aren't helping matters much.
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Victoria's Secret (NYSE: VSCO) stock surged 17% through 10:05 a.m. ET Friday morning after beating on earnings.
Analysts forecast the lingerie retailer would lose $0.59 per share on $1.4 billion in sales in its Q3 2025. Victoria's Secret actually lost only $0.27 (adjusted for one-time items), and sales approached $1.5 billion.
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Victoria's Secret Q3 earnings
Victoria's Secret grew its sales 9% year over year in Q3, with the Victoria's Secret, PINK, and Beauty brands all contributing to growth. Same-store sales alone grew a strong 8%. CEO Hillary Super called the results "outstanding" -- enough so that she raised guidance for the rest of the year.
Victoria's Secret still lost money in the quarter. "Adjusted" earnings aside, Victoria's Secret reported a net loss of $0.46 per share in the quarter. That was better than expected, and better than the $0.71 Victoria's Secret lost one year ago.
But it was still a loss.
Is Victoria's Secret stock a buy?
Turning to guidance, full-year sales are now trending above $6.45 billion, and management says its adjusted earnings this year are also looking better than expected. Not counting the cost of tariffs, Victoria's Secret thinks it could earn anywhere from $2.40 to $2.65 per share this year.
Subtract $90 million in tariff costs, and divide by Victoria's Secret's 80 million shares outstanding, and this leaves the company with at least $1.28 per share in profit this year. On a $49 stock, that works out to a price-to-earnings ratio of about 38.
That's expensive, but even without the tariffs, Victoria's Secret stock would cost 20 times earnings, and be growing at only 9%. Either way you look at it, I fear, Victoria's Secret stock is still too expensive to buy.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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