Why Victoria’s Secret (VSXY) Stock Is Down 18% Despite a Big Earnings Beat

TLDR

• Victoria’s Secret stock fell 18% in premarket trading after Q2 results disappointed Wall Street on sales.
• Adjusted EPS of $0.95 beat estimates of $0.77, but net sales of $1.61 billion slightly missed the $1.62 billion consensus.
• Comparable sales grew 9%, beating estimates but slowing from 13% in Q1.
• Q3 operating income guidance came in well below expectations, with a midpoint of $15 million vs. the $24.4 million Street estimate.
• Full-year revenue guidance was raised to $7.1B-$7.18B, roughly in line with consensus.

Victoria’s Secret stock dropped 18% to $69.61 in premarket trading Thursday after the retailer’s Q2 earnings report failed to satisfy Wall Street, despite a strong earnings beat.

Victoria’s Secret & Company, VSXY

The company posted adjusted EPS of $0.95 for the fiscal second quarter ended August 1, up from $0.33 a year ago and well above the analyst consensus of $0.77. Net sales rose 10% year-over-year to $1.61 billion, just short of the $1.62 billion Wall Street expected.

VICTORIA'S SECRET $VSXY Q2’26 EARNINGS HIGHLIGHTS

🔹 Revenue: $1.61B (Est. $1.62B) 🔴; +10% YoY
🔹 Adj. EPS: $0.95 (Est. $0.77) 🟢; +188% YoY
🔹 Adj. Oper Income: $124M (Est. $101M) 🟢; +125% YoY
🔹 Comparable Sales: 9%

Raises FY26 Guide:
🔹 Revenue: $7.10B-$7.18B (Est. $7.2B)… pic.twitter.com/t564wmO1Ff

— Wall St Engine (@wallstengine) September 3, 2026

Adjusted operating income for the quarter came in at $124 million, up sharply from $55 million in the same period last year.

Total comparable sales increased 9% in the quarter, beating the consensus estimate of 8.8%. But that number marked a slowdown from the 13% comparable sales growth posted in Q1, and Wall Street noticed.

Q3 Operating Income Guidance Disappoints

The bigger issue for investors was Q3 guidance. Victoria’s Secret forecast third-quarter revenue of $1.57 billion to $1.6 billion, slightly above the $1.56 billion Street estimate.

However, Q3 operating income guidance came in well below expectations. The midpoint of the company’s guidance was $15 million, compared to analyst estimates of $24.4 million.

CEO Hillary Super attributed the light operating income outlook to a planned increase in marketing spend. “We see significant opportunity ahead and are doubling down on what is working,” she said. “We are increasing our strategic marketing investment to expand our reach, deepen customer connection, and build on the brand heat we are creating.”

The stock had been on a strong run heading into earnings. It was up 57% for the year as of Wednesday’s close, as investors backed the ongoing business turnaround under Super’s leadership.

Full-Year Guidance Raised

On the positive side, Victoria’s Secret raised its full-year 2026 revenue guidance to $7.1 billion to $7.18 billion, up from a previous range of $7.03 billion to $7.13 billion. That was roughly in line with the $7.14 billion consensus.

The company also lifted its 2026 adjusted operating income guidance to $560 million to $590 million, up from $550 million to $580 million.

Guggenheim analyst Simeon Siegel noted the “strong bottom-line beat” but flagged that implied Q4 earnings are tracking below Wall Street’s consensus view.

The stock ended Wednesday up 0.8% before the premarket selloff hit.

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