Rating Outlook Upgrade
S&P Global Ratings revised its outlook on Victoria’s Secret & Co. (NYSE:VSCO) to positive from stable on 16 June 2026 and affirmed the company’s BB‑ rating. The agency cited better‑than‑expected operating performance and double‑digit market‑share growth in the first quarter of 2026.
First‑Quarter Performance
For the quarter ended 2 May 2026, consolidated revenue increased 15 % year‑on‑year, driven by 13 % comparable‑sales growth. Digital traffic surged, with app downloads up 50 %, while physical‑store traffic rose by mid‑single‑digit percentages. The brand attracted double‑digit gains in new customers, especially in the 18‑24 age segment, and saw stronger acquisition among households earning under $50,000 and over $200,000, despite fewer sales promotions.
Outlook and Financial Projections
S&P projects adjusted operating margins for fiscal 2026 to be in the mid‑ to high‑17 % range, up from 16.6 % in fiscal 2025. Total consolidated revenue is forecast to grow roughly 8 % in FY 2026, supported by new store openings, brand campaigns across Victoria’s Secret, PINK and Beauty segments, and influencer collaborations. Leverage is expected to improve to approximately 2.4 times in 2026 from 2.6 times in 2025. Reported free operating cash flow is projected at about $356 million for FY 2026, versus roughly $312 million in FY 2025. As of the end of Q1 2026, the company held about $207 million in cash and had roughly $685 million available under its $750 million asset‑based lending facility.
Governance Note
The agency highlighted governance risk stemming from activist investor BBRC International, which owns an 11.6 % stake and has advocated for board changes. Nevertheless, shareholders re‑elected the incumbent board at the annual meeting held in June 2026.
Management
The strategic execution is overseen by CEO Hillary Super, under whose leadership the “promo detox” initiative and disciplined inventory management are expected to sustain profitability improvements.