"Look how they massacred my boy." - Victoria's Secret's net income, probably.

Earnings season has a way of stripping companies bare, and Victoria’s Secret just reminded Wall Street what happens when the lights come on. Sure, sales were stronger than expected — but net income got halved, tariffs doubled, and the outlook for Q3 reads like the “secret” consists of getting bent over by reality. 

(Source: Giphy) 

In short, Q2 revenue came in at $1.46 billion, ahead of expectations, and adjusted EPS landed at $0.33… which is more than double what analysts thought. Comparable sales were up 4%. Management even had the gall to raise full-year revenue guidance to $6.33B–$6.41B, topping the old $6.2B–$6.3B range.

(Source: Wall Street Journal) 

But then came havoc: tariffs.  The hit is now pegged at $100 million, double what they warned last time. Imagine selling padded bras and realizing Uncle Sam just stuffed your costs with sandbags. That’s the reality.

Whereas, the actual P&L was a push-up illusion. Net income slid to $16M from $32M a year ago… with operating guidance still setting between $270M–$320M. However, Q3 looks bigly bad as projected revenue sits between $1.39B–$1.42B, paired with an operating loss of $35M–$55M thanks to the Adore Me acquisition hangover. Translation: the top line is fine, the bottom line is on life support.

(Source: Giphy) 

What’s interesting though, is that investors haven’t exactly been horned up over the stock all year. Shares are down -42% YTD, even as the rest of the S&P floats higher. However, considering the top line did what it was supposed to… there seemed to be a bit of forgiveness as the only thing still propping up shares today is what management calls “disciplined inventory management” and “promotional approach.” In other words, Victoria’s Secret didn’t drown in unsold lingerie and markdowns this time. 

With that said, the bigger question for investors is this: does Victoria’s Secret actually have pricing power in a world where tariffs are doubling, consumer wallets are pinched, and Shein is blasting your algorithm with $5 bodysuits? Right now, the guidance bump suggests they’ve still got enough brand heat to draw traffic, but every extra tax eats directly into already-thin margins.

(Source: Giphy) 

Meaning, yes, Victoria’s Secret just beat estimates. Yes, they raised sales guidance. But the market’s not drooling… investors are checking the tags, seeing a $100M tariff surcharge, and wondering if the fantasy still sells once the lights come on. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.