Sexy Is Back

Victoria’s Secret $VSXY spent years trying to figure out what it wanted to be.

Not long ago, this was one of the most recognizable retail brands in America. 

Bras, panties, lingerie, sleepwear, beauty, fragrance, PINK, the Angels, the fashion show, the mall-store empire, the whole thing.

Everybody knows Victoria’s Secret.

For a long time, the company lost its way.

The brand became confused, the stock became a disaster, and investors wanted nothing to do with it. 

From its post-spinoff peak in 2021, VSXY spent years carving out a massive bearish-to-bullish reversal pattern while the business tried to repair the damage.

Now that repair process seems to be nearing completion.

Victoria’s Secret is leaning back into what made the brand powerful in the first place: sexy, glamorous, emotional, fashion-led storytelling tied to products customers actually want to buy. 

Management calls this “world building,” creating distinct identities for Victoria’s Secret and PINK where the product, marketing, customer experience, and visual presentation all reinforce the same message.

And the market is responding.

After the company’s latest earnings report at the beginning of June, VSXY exploded nearly 50% in a single session, gapping to a new all-time high and completing one of the cleanest bases in the market.

Since then, VSXY has been digesting those gains in a tight range near the highs.

That's exactly the type of consolidation we want to see.

When a stock gaps to new highs and then holds those gains rather than giving them back, it tells us demand is still overwhelming supply.

And the earnings scorecard explains why.

Victoria’s Secret reported a top- and bottom-line beat, with revenue growth of 15.5% YoY, the strongest growth rate we have seen from the company in years. 

What's more, EPS exploded higher by more than 500% YoY.

In other words, June's report was historic, and the strength was broad-based.

Victoria’s Secret, PINK, and Beauty all delivered double-digit sales growth. 

And the company was able to generate better regular-price selling while reducing promotions.

That last part matters...

This was not just a discount-driven quarter.

Management called it a “promo detox,” meaning they're pulling back on markdowns and replacing cheap promotional hooks with stronger brand storytelling. 

That's exactly what healthy retailers do when their brands are getting stronger.

The customer is not just showing up because the product is on sale.

She's showing up because the brand is hot again.

And as a result of the brand's resurgence, the management team raised its full-year outlook. 

Victoria’s Secret now expects fiscal 2026 net sales of $7.03 billion to $7.13 billion and adjusted operating income of $550 million to $580 million, both above prior guidance.

So what we have here is a stock with very strong technicals, fundamentals, and earnings sentiment.

The only question left is whether VSXY can keep building above the old $76 breakout zone. 

If buyers continue to defend that level, the path of least resistance remains higher, and this consolidation near the highs should resolve into another leg up.

Victoria’s Secret lost the plot for a while, but now it looks like sexy is back.

And the market loves it.

We just held our first-ever Beat Report Pitch Meeting.

For nearly two and a half hours, the Beat Team pitched its highest-conviction trade ideas and debated them live with Steve Strazza in front of our members.

Today, we put on one of those trades.

Steve also pitched another consumer discretionary stock that we think could be one of the next big winners from here.

If you want access to the full meeting, the trade ideas, and our next alerts, join The Beat Report today.

We hope you had a good holiday weekend,

-The Beat Team