Victoria's Secret & Co. (VSXY) F2Q26 Earnings Review Brand initiatives driving healthy sales momentum and FY guidance raise...

Equity Research 4 September 2026 | 1:11PM MDT

Victoria’s Secret & Co. (VSXY) F2Q26 Earnings Review: Brand initiatives driving healthy sales momentum and FY guidance raised; pace of revenue growth and reinvestment in focus

VSXY 12m Price Target: $85.00 Price: $73.64 Upside: 15.4% NEUTRAL Brooke Roach, CFA VSXY beat 2Q earnings and raised FY26 guidance. In the quarter, | Goldman Sachs & Co. LLC comps came in slightly ahead of FactSet consensus expectations Mentesnot Adamu (+9.0% vs. consensus at +8.8%), though based on conversations fell | Goldman Sachs & Co. LLC short of elevated investor expectations. Earnings outperformance was strong, with adjusted EPS of $0.95 vs. consensus at $0.77 and Carly Chasen | Goldman Sachs & Co. LLC adjusted EBIT margin expanding 390bps to 7.7%. While FY26 guidance was raised, the increase was more modest than the magnitude of the quarter’s upside as management elected to Key Data _____________________________________ Market cap: $5.9bn reinvest a portion of outperformance into marketing and customer Enterprise value: $6.0bn 3m ADTV: $155.8mn acquisition initiatives. United States Americas Apparel & Accessories Brands Strength in the quarter was broad-based, as Victoria’s Secret, PINK, M&A Rank: 3

and Beauty all delivered growth, with momentum across categories, GS Forecast __________________________________ 1/26 1/27E 1/29E 1/30E channels, and geographies. Management spoke to reduced Revenue ($ mn) New 6,553.4 7,173.0 7,490.3 7,801.5

promotions, HSD AUR expansion, and higher regular-price selling, Revenue ($ mn) Old 6,553.4 7,115.5 7,449.1 7,775.8 EPS ($) New which supported strong gross margin delivery (+320bps y/y). EPS ($) Old

Management also highlighted MSD customer file growth, HSD new P/E (X) EV/EBITDA (X) customer acquisition growth, continued intimates market share FCF yield (%) Dividend yield (%) 0.0 0.0 0.0 0.0 gains, and broad-based engagement across age and income Net debt/EBITDA (X) 0.7 0.1 (0.2) (0.5) cohorts. That said, management also noted that 2Q sales were 7/26 10/26E 1/27E 4/28E impacted by a softer-than-expected Semi-Annual Sale, reflecting EPS ($) inventory constraints in certain categories and weaker traffic during GS Factor Profile ______________________________ portions of the event. Product newness was a key learning, with Growth

plans to introduce more newness in the back half of future Financial Returns Semi-Annual Sale periods. Multiple

Looking ahead, management maintained a constructive tone on Integrated underlying demand trends, guiding 3Q sales growth of 7%-9% and an acceleration in the two-year stack to 16%-18%. However, the Percentile 20th 40th 60th 80th 100th

company is going up against tougher comparisons (investor focus is VSXY relative to Americas Coverage

increasingly centered on durability of comp momentum), and the VSXY relative to Americas Apparel & Accessories Brands

magnitude of reinvestment is muddling the picture on margins into Source: Company data, Goldman Sachs Research estimates. See disclosures for details. 2027 as management balances prudent reinvestment with flow-through and faces select cost headwinds (Y/Y tariff cycling,

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Goldman Sachs Victoria’s Secret & Co. (VSXY)

Victoria’s Secret & Co. (VSXY) Income Statement ($ mn) ___________________________________ NEUTRAL Rating since Oct 27, 2025 1/26 1/27E 1/29E 1/30E Total revenue 6,553.4 7,173.0 7,490.3 7,801.5 Cost of goods sold (4,128.9) (4,370.5) (4,514.3) (4,670.9) SG&A (2,022.0) (2,210.7) (2,301.7) (2,390.3) Ratios & Valuation __________________________________________ R&D -- -- -- -- 1/26 1/27E 1/29E 1/30E Other operating inc./(exp.) -- -- -- -- P/E (X) EBITDA EV/EBITDA (X)…