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Victoria's Secret stock has been trending lower for the last three years
Analysts have continued to lower earnings estimates giving VSCO the lowest Zacks Rank
Victoria’s Secret ((VSCO - Free Report) ) is my latest addition to our Bear of the Day list, and it’s another example of a once-dominant apparel brand struggling to adapt to shifting consumer preferences. Like many legacy retailers in the fashion space, Victoria’s Secret has fallen out of favor in a rapidly evolving marketplace where brand relevance and customer loyalty are harder than ever to maintain.
Revenue growth has been stagnant at best, with recent quarters showing flat or declining sales. Unfortunately, the outlook doesn’t inspire confidence either. Analysts have been steadily lowering their earnings estimates, signaling a broader loss of confidence in the company’s ability to execute a turnaround. As a result, the stock has suffered a steep decline—down sharply year to date and significantly underperforming over the past three years. With little near-term momentum and continued downward revisions, the stock remains under pressure.
Image Source: Zacks Investment Research
Victoria’s Secret Stock Falters on Downgrades
Victoria’s Secret has come under heavy pressure in recent months as analysts have issued sharp and widespread earnings downgrades. The stock now holds a Zacks Rank #5 (Strong Sell), reflecting both deteriorating fundamentals and rapidly falling expectations.
Over the past two months, earnings estimates have been slashed across the board. Current quarter projections have plunged by 62%, while full-year estimates for both this year and next are down 12.2% and 13.1%, respectively. Such steep revisions suggest a deepening lack of confidence in the company’s near-term performance.
The downgrades come amid a longer-term trend of declining revenue. Annual sales have fallen from $6.7 billion in 2022 to just $6.2 billion over the trailing twelve months. Looking ahead, Wall Street isn’t forecasting a rebound as sales are expected to remain essentially flat through at least next year. Without clear signs of growth or strategic reinvention, Victoria’s Secret faces a tough road ahead in an increasingly competitive retail landscape.
Image Source: Zacks Investment Research
Should Investors Avoid VSCO Stock?
Given the sharp downward momentum in both the stock and earnings estimates, investors may want to steer clear of Victoria’s Secret for now. The company faces multiple headwinds: a stagnant top line, shrinking margins, and a highly competitive retail environment dominated by more agile, digitally native brands that are better aligned with today’s consumer preferences.
In addition to the declining revenue and earnings outlook, the company lacks a clear turnaround strategy or growth catalyst. Its brand, which once defined a category, has struggled to maintain cultural relevance in an era of shifting values and consumer expectations. Meanwhile, promotional activity across the sector is intensifying, placing further pressure on profitability.
With a Zacks Rank #5 (Strong Sell), ongoing analyst downgrades, and no visible signs of a reversal in fundamentals, VSCO appears to be a stock best avoided until there is meaningful improvement in its outlook or execution.
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Bear of the Day: Victoria's Secret (VSCO)
Key Takeaways
Victoria’s Secret ((VSCO - Free Report) ) is my latest addition to our Bear of the Day list, and it’s another example of a once-dominant apparel brand struggling to adapt to shifting consumer preferences. Like many legacy retailers in the fashion space, Victoria’s Secret has fallen out of favor in a rapidly evolving marketplace where brand relevance and customer loyalty are harder than ever to maintain.
Revenue growth has been stagnant at best, with recent quarters showing flat or declining sales. Unfortunately, the outlook doesn’t inspire confidence either. Analysts have been steadily lowering their earnings estimates, signaling a broader loss of confidence in the company’s ability to execute a turnaround. As a result, the stock has suffered a steep decline—down sharply year to date and significantly underperforming over the past three years. With little near-term momentum and continued downward revisions, the stock remains under pressure.
Image Source: Zacks Investment Research
Victoria’s Secret Stock Falters on Downgrades
Victoria’s Secret has come under heavy pressure in recent months as analysts have issued sharp and widespread earnings downgrades. The stock now holds a Zacks Rank #5 (Strong Sell), reflecting both deteriorating fundamentals and rapidly falling expectations.
Over the past two months, earnings estimates have been slashed across the board. Current quarter projections have plunged by 62%, while full-year estimates for both this year and next are down 12.2% and 13.1%, respectively. Such steep revisions suggest a deepening lack of confidence in the company’s near-term performance.
The downgrades come amid a longer-term trend of declining revenue. Annual sales have fallen from $6.7 billion in 2022 to just $6.2 billion over the trailing twelve months. Looking ahead, Wall Street isn’t forecasting a rebound as sales are expected to remain essentially flat through at least next year. Without clear signs of growth or strategic reinvention, Victoria’s Secret faces a tough road ahead in an increasingly competitive retail landscape.
Image Source: Zacks Investment Research
Should Investors Avoid VSCO Stock?
Given the sharp downward momentum in both the stock and earnings estimates, investors may want to steer clear of Victoria’s Secret for now. The company faces multiple headwinds: a stagnant top line, shrinking margins, and a highly competitive retail environment dominated by more agile, digitally native brands that are better aligned with today’s consumer preferences.
In addition to the declining revenue and earnings outlook, the company lacks a clear turnaround strategy or growth catalyst. Its brand, which once defined a category, has struggled to maintain cultural relevance in an era of shifting values and consumer expectations. Meanwhile, promotional activity across the sector is intensifying, placing further pressure on profitability.
With a Zacks Rank #5 (Strong Sell), ongoing analyst downgrades, and no visible signs of a reversal in fundamentals, VSCO appears to be a stock best avoided until there is meaningful improvement in its outlook or execution.