Victoria's Secret Raises Its Full-Year Sales Outlook but Guides Third-Quarter Operating Income to $10 Million to $20 Million

by Clara Borresen · September 3, 2026

Senior Earnings Analyst, Earnings Dispatch

Victoria's Secret & Co. reported second-quarter net sales of $1.611 billion Thursday morning, a 10% increase from $1.459 billion a year earlier, with comparable sales across stores and direct up 9%. The retailer raised the top and bottom of its full-year sales range. It also handed investors a third-quarter profit guide that sits well below what analysts had modeled, and the second number is the one the market traded on.

The two reporting bases diverged unusually far in the quarter, and the reason is a one-time item. GAAP operating income was $257 million, against $41 million a year ago. Adjusted operating income was $124 million, against $55 million a year ago and ahead of the company's own guidance range of $90 million to $100 million. GAAP diluted earnings were $2.18 a share versus $0.20 a year earlier, while adjusted diluted earnings were $0.95 against $0.33 a year ago and guidance of $0.65 to $0.75. Gross profit was $759.3 million, or about 47% of net sales.

The tariff refund sits outside the adjusted numbers

The company said it received IEEPA tariff refund recoveries, including interest, of more than $140 million — "over 95% of the IEEPA tariffs paid by the Company" — on duties collected under the International Emergency Economic Powers Act. That recovery sits in the GAAP figures and outside the adjusted ones: GAAP operating income for the quarter exceeded adjusted operating income by $133 million, and in the full-year outlook the GAAP operating income range runs about $129 million above the adjusted range. On that evidence the raise to the adjusted full-year outlook is not a refund artifact — the adjusted operating income range moved up by $10 million at each end, a fraction of the refund, which the adjusted presentation excludes.

On the adjusted line the beat was real by either survey, though the two compilers do not agree on the starting point. Zacks put its consensus at $0.78 a share, making the $0.95 result a 21.80% surprise, and its revenue consensus at $1.625 billion, which the $1.61 billion result missed by 0.86%. An Investing.com account of the report cited a $0.75 estimate for earnings and about $1.62 billion for revenue. Both compilers had revenue slightly above where the quarter landed.

The full-year raise

For fiscal 2026 the company now guides net sales of $7.100 billion to $7.180 billion, up from a prior range of $7.030 billion to $7.130 billion and against $6.553 billion in fiscal 2025 — growth of roughly 8.3% to 9.6%. Net sales is a GAAP measure, and the outlook carries GAAP lines below it as well: GAAP operating income of $689 million to $719 million and GAAP earnings of $5.64 to $5.89 a diluted share.

On the adjusted side, full-year operating income guidance moved to $560 million to $590 million from $550 million to $580 million, against $403 million in fiscal 2025, with adjusted earnings of $4.45 to $4.70 a diluted share. That adjusted earnings range sits entirely below the $4.71 full-year consensus Zacks reported on Sept. 3 — a detail easy to miss when the headline is a guidance raise.

The quarter in front of them

Third-quarter guidance is where the report turned. The company put net sales at $1.570 billion to $1.600 billion, against $1.472 billion in last year's third quarter and above the roughly $1.56 billion consensus figure Investing.com cited. Operating income, however, was guided to $10 million to $20 million — and the release states that as GAAP operating income, comparing it with adjusted operating income of about zero in the year-earlier quarter. Investing.com reported that the roughly $15 million midpoint fell short of a Street estimate near $24.4 million; that account does not say whether the Street figure is a GAAP or an adjusted number. Neither comparison, then, is strictly like-for-like: a GAAP guidance range is being set against a prior-year adjusted result on one side and an unlabelled analyst estimate on the other. The direction of the shortfall is not in doubt, but its precise size depends on a basis nobody has stated.

Management framed the near-term profit compression as a choice rather than a shortfall. Chief Executive Hillary Super said in the release that the company sees "significant opportunity ahead and are doubling down on what is working," adding: "We are increasing our strategic marketing investment to expand our reach, deepen customer connection, and build on the brand heat we are creating." Super also said the quarter delivered "broad-based growth across the business" and that the company's customer file is growing. Chief Financial and Operating Officer Scott Sekella said second-quarter results demonstrated the continued strength and improving quality of the business, with net sales up 10%, near the high end of guidance, and adjusted operating income above expectations.

The market read the marketing step-up as a cost before it is a return. An Investing.com report carried by Yahoo Finance and time-stamped 8:31 a.m. ET Thursday said the shares had fallen more than 16% in premarket trading. Regular-hours trading was still under way at the time of writing and no closing level for Thursday was available.

Context for the drop matters: Zacks noted the shares had gained about 56.6% since the start of the year against a 12% advance for the S&P 500, which closed Wednesday at 7,666.60, a gain of 0.5% on the day. A stock that has more than kept pace with a strong tape has less room to absorb a soft quarterly profit guide, whatever the reason behind it.

The report lands in the thick of the off-cycle retail calendar, with Lululemon Athletica due after Thursday's close and RH scheduled before Friday's open, according to an earnings calendar published by Kiplinger for the week of Aug. 31 to Sept. 4. Nothing in this article is investment advice.