NYSE:VSCO
Victoria's Secret & Co.
A leading North American retailer of premium intimates, sleepwear, and beauty that leverages its iconic brand heritage to drive revenue growth.
Key Metrics
Investment Thesis
Bull Case
The stock offers exposure to the resilient beauty and intimate apparel categories with a path toward margin expansion through its high-margin beauty segment and cost optimization initiatives that have improved the CFO-to-net-income ratio significantly.
Bear Case
Investors should be cautious due to the company's substantial long-term debt load of $973M, declining revenue trends over the last five years, and persistent working capital pressures indicated by negative changes in inventory and accounts receivable.
About Victoria's Secret & Co.
Victoria's Secret & Co. operates as a premier lifestyle brand focusing on intimate apparel, lingerie, sleepwear, swimwear, beauty products, and accessories primarily in the United States and international markets.
Analysis
Management Discussion
Management successfully navigated a challenging macroeconomic environment, generating $169M in net profit on $6.23B in revenue while maintaining healthy operating cash flows of $425M despite significant capital expenditures for store modernization and digital infrastructure upgrades.
Industry Overview
The global intimate apparel industry is shifting toward value-driven consumption and digital-first shopping experiences, forcing legacy retailers to balance premium branding with affordability to retain market share against agile online competitors.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $6.34B | $6.18B | $6.23B |
| Cost of Revenue | $4.09B | $3.94B | $3.95B |
| Gross Profit | $2.26B | $2.24B | $2.28B |
| Operating Expenses | $1.78B | $2.00B | $1.97B |
| Operating Income | $478.0M | $246.0M | $310.0M |
| G&A | $1.78B | $2.00B | $1.97B |
| Stock-Based Comp | $48.0M | $56.0M | $60.0M |
| D&A | — | $284.0M | $258.0M |
| Depreciation | $274.0M | $259.0M | $226.0M |
| Amortization | $0 | $25.0M | $25.0M |
| Other OpEx | $0 | $0 | $0 |
| Non-Operating Income | $-61.0M | $-99.0M | $-89.0M |
| Interest Expense | $60.0M | $99.0M | — |
| Pre-Tax Income | $417.0M | $147.0M | $221.0M |
| Income Tax | $79.0M | $31.0M | $52.0M |
| Continuing Ops | $338.0M | $116.0M | $169.0M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $338.0M | $116.0M | $169.0M |
| Minority Interest | $-10.0M | $7.0M | $4.0M |
| Net to Common | $348.0M | $109.0M | $165.0M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $1.74B | $1.53B | $1.44B |
| Cash & Equivalents | $427.0M | $270.0M | $227.0M |
| Accounts Receivable | $141.0M | $152.0M | $159.0M |
| Inventory | $1.05B | $985.0M | $955.0M |
| Other Current Assets | $117.0M | $126.0M | $100.0M |
| Long-Term Assets | $2.97B | $3.07B | $3.09B |
| PP&E (Net) | $846.0M | $843.0M | $774.0M |
| Goodwill | $365.0M | $367.0M | $367.0M |
| Operating Leases | $1.23B | $1.35B | $1.48B |
| Other LT Assets | $475.0M | $446.0M | $422.0M |
| Total Assets | $4.71B | $4.60B | $4.53B |
| Current Liabilities | $1.58B | $1.61B | $1.38B |
| Accounts Payable | $481.0M | $513.0M | $419.0M |
| Current Debt | $4.0M | $4.0M | $4.0M |
| Current Leases | $310.0M | $267.0M | $287.0M |
| Taxes Payable | $47.0M | $20.0M | $32.0M |
| Other Current Liab | $0 | $0 | $0 |
| Long-Term Liabilities | $2.73B | $2.55B | $2.49B |
| Long-Term Debt | $1.27B | $1.12B | $973.0M |
| LT Operating Leases | $1.20B | $1.31B | $1.43B |
| Other LT Liab | $259.0M | $116.0M | $86.0M |
| Total Liabilities | $4.31B | $4.16B | $3.87B |
| Shareholders' Equity | $401.0M | $438.0M | $664.0M |
| Retained Earnings | $186.0M | $178.0M | $343.0M |
| AOCI | $1.0M | $0 | $-1.0M |
| Total L&E | $4.71B | $4.60B | $4.53B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $338.0M | $116.0M | $169.0M |
| Non-Cash Adjustments | $364.0M | $267.0M | $378.0M |
| Working Capital Changes | $-265.0M | $6.0M | $-122.0M |
| Cash from Operations | $437.0M | $389.0M | $425.0M |
| Capital Expenditures | $164.0M | $256.0M | $178.0M |
| Cash from Investing | $-555.0M | $-254.0M | $-153.0M |
| Debt Repayments | $4.0M | $4.0M | $4.0M |
| Share Buybacks | $250.0M | $125.0M | $0 |
| Cash from Financing | $58.0M | $-291.0M | $-315.0M |
| FX Effect | $-3.0M | $-1.0M | $0 |
| Net Change in Cash | $-63.0M | $-157.0M | $-43.0M |
| Beginning Cash | $490.0M | $427.0M | $270.0M |
| Ending Cash | $427.0M | $270.0M | $227.0M |
Frequently Asked Questions
How does Victoria's Secret & Co. make money?
The company's financials reflect a diverse mix of direct-to-consumer digital sales, proprietary retail stores, and wholesale partnerships with major department store chains, alongside its expanding beauty division which contributes significantly to gross margins.
What are the main risks for VSCO?
Volatile consumer spending patterns in discretionary categories, intense competition from fast-fashion disruptors like Shein and Amazon Basics, inventory management challenges given high COGS relative to revenue, and potential regulatory scrutiny regarding body image marketing practices.
What is VSCO's competitive advantage?
Strong brand equity built on decades of marketing influence, a high-loyalty customer base driven by the Angel Collection and celebrity partnerships, and an integrated omnichannel retail strategy that bridges physical stores with robust e-commerce platforms.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.