Intimatewear and beauty retailer Victoria’s Secret (NYSE: VSCO) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 15.3% year on year to $1.56 billion. Guidance for next quarter’s revenue was optimistic at $1.60 billion at the midpoint, 2.9% above analysts’ estimates. Its non-GAAP profit of $0.60 per share was 90.2% above analysts’ consensus estimates.

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StockStory’s Take

Victoria’s Secret delivered a first quarter marked by broad-based growth, as management attributed the results to strong customer acquisition, reduced promotional activity, and compelling brand campaigns across its Victoria’s Secret, PINK, and Beauty segments. CEO Hillary Super highlighted that the company saw double-digit gains in new customers, especially among both lower and higher income brackets, and noted that “the strongest growth came from customers and households earning under $50,000 annually and over $200,000.” The quarter’s performance was further supported by momentum in digital engagement and an effective reduction in markdowns.

Looking ahead, management’s raised outlook rests on continued execution of its Path to Potential strategy, ongoing product innovation, and increased marketing investment in key initiatives such as new bra launches and the upcoming fashion show. CFO Scott Sekella stated the company expects operating margin expansion, driven by a disciplined approach to promotions and regular price selling, while remaining mindful of tariff-related headwinds. Super emphasized that a robust calendar of product launches and collaborations, as well as a focus on expanding core categories and customer engagement, are expected to sustain growth through the remainder of the year.

Key Insights from Management’s Remarks

Management credited first quarter gains to disciplined promotional reduction, new product launches, and strengthened brand affinity, particularly among younger and more diverse customer segments.

• Promotional Pullback Drives Margins: Management’s ongoing “promo detox” strategy reduced reliance on discounts, resulting in higher average unit retail (AUR) and healthier margins. Sekella noted, “coming in on emotion versus promotion” was key to attracting new customers at higher price points and supporting margin expansion.

• New Customer Growth Broad-Based: Victoria’s Secret saw double-digit new customer growth, with significant increases among both lower-income (under $50,000) and higher-income (over $200,000) households. Super highlighted that this diversity in customer acquisition underscores brand relevance and broad appeal across demographics.

• Product Innovation in Core Categories: The company’s focus on its bra category—including refreshed collections like Signature and the launch of the Invisible Strapless Collection—drove new customer acquisition and increased engagement, especially with the 18- to 24-year-old demographic.

• Brand Campaigns and Partnerships: High-profile campaigns, such as the Valentine’s Day Hailey Bieber partnership and the “Angels Among Us” talent search, created strong brand heat and drove significant social media engagement, with over 1.7 billion impressions for the latter. These initiatives reinforced brand identity and cultural relevance.

• Digital and Store Channel Momentum: Digital traffic outpaced store growth, with a notable 50% increase in app downloads, while stores also saw mid-single-digit traffic growth. Improved customer analytics and targeted marketing contributed to efficient new customer acquisition across all channels.

Drivers of Future Performance

Victoria’s Secret’s full-year outlook is underpinned by continued innovation in core categories, disciplined promotion, and investment in brand-building marketing initiatives.

• Sustained Product Launch Cadence: Management expects multiple bra launches for both Victoria’s Secret and PINK in the coming quarters, along with new collaborations and franchise extensions, to maintain customer engagement and support top-line growth.

• Margin Expansion Amid Tariff Volatility: Although tariffs remain a headwind, Sekella guided for operating margin improvement through ongoing reduction in promotions, higher regular price selling, and continued leverage on buying and occupancy expenses. The company is also shifting some supply chain strategies, such as increased use of ocean freight, to further manage costs.

• Continued Marketing Investment: Super indicated a willingness to reinvest in marketing to amplify the flywheel from recent successful campaigns. Management believes that increased spend in targeted marketing channels and digital content will drive higher customer engagement and future sales, while remaining flexible to adjust spending based on performance.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be watching (1) the effectiveness of upcoming product launches and collaborations in sustaining customer engagement and sales momentum, (2) management’s ability to maintain margin improvement while navigating ongoing tariff and supply chain pressures, and (3) further expansion in digital engagement, particularly through app growth and targeted marketing. Success on these fronts will be essential to maintaining the current trajectory.

Victoria's Secret currently trades at $55.18, up from $54.30 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

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