Tariff increases: Victoria's Secret lowers profit forecast

Last week, US lingerie retailer Victoria's Secret and Co. (VS) had to postpone the publication of its final results for the first quarter of the 2025/26 financial year. At the time, a security-relevant incident in the IT system prevented the interim report from being completed on time.

On Wednesday, the parent company of the Victoria's Secret, Pink and Adore Me brands was able to present its complete figures. These offered no surprises, as the company had already published preliminary key data a few days prior. However, management lowered its profit forecast for the full year. This was justified by the expected additional burdens due to the recent tariff increases.

Group revenue declined slightly

In the first quarter, which ended on May 3, group revenue amounted to around 1.35 billion dollars. This represented a decrease of 0.5 percent compared to the same period of the previous year. Nevertheless, this slightly exceeded management's original forecast.

Revenue in North American stores fell by 1.1 percent to 721.3 million dollars, while online sales fell by 3.5 percent to 433.2 million dollars. An increase in revenue of 9.3 percent to 198.4 million dollars in international business was not enough to fully compensate for these declines.

Victoria’s Secret significantly reduced its quarterly loss

Despite savings in operating costs, reported operating profit fell by 24.7 percent to 19.8 million dollars. Adjusted for special effects, it shrank by 20 percent to 31.7 million dollars, also slightly exceeding expectations.

However, the group was able to more than halve its net loss attributable to shareholders due to lower financing costs and lower tax burdens. It decreased from 3.64 million dollars in the prior-year quarter to 1.66 million dollars. Diluted loss per share fell from 0.05 dollars to 0.02 dollars.

Management confirmed its sales forecast, but lowered its profit target for the current year

Based on the available figures and current economic developments, the group adjusted its annual forecasts. The sales target remained unchanged at 6.2 to 6.3 billion dollars.

However, the forecast for adjusted operating profit, which had previously been 300 to 350 million dollars, was lowered to 270 to 320 million dollars. The company justified this step by saying that additional costs of around 50 million dollars were now expected due to tariff increases.