We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How VSCO Plans to Mitigate $160 Million in New Tariff Pressures?
Read MoreHide Full Article
Key Takeaways
VSCO expects about $160 million in gross tariff pressure, with net impact near $40 million.
Victoria's Secret is diversifying sourcing and optimizing vendor costs to offset inflation.
Selective price hikes and lower promotions are expected to support margin resilience.
Victoria’s Secret & Co. (VSCO - Free Report) anticipates an incremental gross tariff impact of approximately $160 million in fiscal 2026. However, the company expects to mitigate a significant portion of this impact through internal measures, reducing the overall burden. The company’s approach centers on a multi-pronged mitigation plan designed to offset most of the impact and limit the net burden to about $40 million.
A key lever is vendor cost optimization. The company is actively negotiating with suppliers to reduce input costs, using its global scale and sourcing relationships to extract efficiencies. This is paired with a deliberate diversification of sourcing, aimed at reducing dependence on tariff-heavy regions and improving flexibility across the supply chain.
Logistics is a key focus area for the company, with management actively adjusting the mix between air and ocean freight to reduce transportation expenses. Over time, this shift is expected to deliver structural improvements in cost efficiency and support overall operational performance.
Pricing strategy plays a central role in the company’s mitigation framework, with a clear focus on scaling back promotions to encourage higher regular price selling. In addition, selective price increases are being implemented in areas where management identifies clear value gaps in the market. These measures are designed to enhance pricing discipline and support overall financial performance.
These actions are supported by a broader operational discipline that has already delivered margin resilience despite prior tariff headwinds. The combined strategy reflects a coordinated effort to neutralize external cost pressures without relying on a single lever, emphasizing flexibility across sourcing, pricing and logistics.
The Zacks Rundown for VSCO
Shares of this Zacks Rank #1 (Strong Buy) company have gained 70.9% in the past six months compared with the industry’s growth of 4.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, VSCO trades at a forward price-to-earnings ratio of 14.00, lower than the industry’s average of 16.01.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VSCO’s current and next fiscal year earnings implies a year-over-year rise of 15.7% and 19.5%, respectively.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks have been discussed below:
Deckers Outdoors Corporation (DECK - Free Report) , together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally. At present, Deckers carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DECK’s current fiscal-year sales and earnings indicates growth of 8.9% and 8.5%, respectively, from the year-ago figures. DECK delivered a trailing four-quarter earnings surprise of 36.9%, on average.
Levi Strauss & Co. (LEVI - Free Report) designs, markets, and sells apparel and related accessories for men, women, and children in the United States and internationally. At present, LEVI carries a Zacks Rank of 2.
The Zacks Consensus Estimate for LEVI’s current fiscal-year sales and earnings implies growth of 5.2% and 11.9%, respectively, from the year-ago figures. LEVI has delivered a trailing four-quarter earnings surprise of 21.4%, on average.
Tapestry, Inc. (TPR - Free Report) provides accessories and lifestyle brand products in North America, Greater China, the rest of Asia, and internationally. At present, TPR flaunts a Zacks Rank of 2.
The Zacks Consensus Estimate for TPR’s current fiscal-year sales and earnings implies growth of 11.2% and 26.5%, respectively, from the year-ago figures. TPR has delivered a trailing four-quarter earnings surprise of 12.8%, on average.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
How VSCO Plans to Mitigate $160 Million in New Tariff Pressures?
Key Takeaways
Victoria’s Secret & Co. (VSCO - Free Report) anticipates an incremental gross tariff impact of approximately $160 million in fiscal 2026. However, the company expects to mitigate a significant portion of this impact through internal measures, reducing the overall burden. The company’s approach centers on a multi-pronged mitigation plan designed to offset most of the impact and limit the net burden to about $40 million.
A key lever is vendor cost optimization. The company is actively negotiating with suppliers to reduce input costs, using its global scale and sourcing relationships to extract efficiencies. This is paired with a deliberate diversification of sourcing, aimed at reducing dependence on tariff-heavy regions and improving flexibility across the supply chain.
Logistics is a key focus area for the company, with management actively adjusting the mix between air and ocean freight to reduce transportation expenses. Over time, this shift is expected to deliver structural improvements in cost efficiency and support overall operational performance.
Pricing strategy plays a central role in the company’s mitigation framework, with a clear focus on scaling back promotions to encourage higher regular price selling. In addition, selective price increases are being implemented in areas where management identifies clear value gaps in the market. These measures are designed to enhance pricing discipline and support overall financial performance.
These actions are supported by a broader operational discipline that has already delivered margin resilience despite prior tariff headwinds. The combined strategy reflects a coordinated effort to neutralize external cost pressures without relying on a single lever, emphasizing flexibility across sourcing, pricing and logistics.
The Zacks Rundown for VSCO
Shares of this Zacks Rank #1 (Strong Buy) company have gained 70.9% in the past six months compared with the industry’s growth of 4.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, VSCO trades at a forward price-to-earnings ratio of 14.00, lower than the industry’s average of 16.01.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VSCO’s current and next fiscal year earnings implies a year-over-year rise of 15.7% and 19.5%, respectively.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks have been discussed below:
Deckers Outdoors Corporation (DECK - Free Report) , together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally. At present, Deckers carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DECK’s current fiscal-year sales and earnings indicates growth of 8.9% and 8.5%, respectively, from the year-ago figures. DECK delivered a trailing four-quarter earnings surprise of 36.9%, on average.
Levi Strauss & Co. (LEVI - Free Report) designs, markets, and sells apparel and related accessories for men, women, and children in the United States and internationally. At present, LEVI carries a Zacks Rank of 2.
The Zacks Consensus Estimate for LEVI’s current fiscal-year sales and earnings implies growth of 5.2% and 11.9%, respectively, from the year-ago figures. LEVI has delivered a trailing four-quarter earnings surprise of 21.4%, on average.
Tapestry, Inc. (TPR - Free Report) provides accessories and lifestyle brand products in North America, Greater China, the rest of Asia, and internationally. At present, TPR flaunts a Zacks Rank of 2.
The Zacks Consensus Estimate for TPR’s current fiscal-year sales and earnings implies growth of 11.2% and 26.5%, respectively, from the year-ago figures. TPR has delivered a trailing four-quarter earnings surprise of 12.8%, on average.