"Earnings tell most of the story of Victoria's Secret hurdles. EPS fell by half to $.20. Revenue barely inched up to $1.459 billion. Same-store sales also barely rose by 3%. With worry about an overall drop in U.S. retail sales and the question of whether companies or their customers take on the burden of tariff-driven prices, the chances that the stock will rise are unlikely."
"Although some of Victoria's Secret products are exciting, the company itself is not. Its stock sits in the middle of its 52-week range. Net profit margins have been choppy and below 3% recently. Victoria's Secret's challenges are the same as those of many niche retailers. It is the "Foot Locker" problem. Too few locations, and products similar to its merchandise are available at companies with larger store footprints."
Victoria's Secret shows stagnant sales growth, declining earnings, and thin net profit margins under 3%. UBS set a neutral rating with a $25 price target while the stock trades around $26. Recent EPS fell by half to $0.20, and revenue rose marginally to $1.459 billion with same-store sales up only about 3%. Tariff pressures and an overall soft U.S. retail environment threaten margins and consumer demand. Store footprint limitations and competition from retailers with larger networks limit growth prospects. Guidance was raised modestly but failed to materially change investor sentiment. The stock remains mid-range and lacks compelling catalysts.
Read at 24/7 Wall St.
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