Victoria's Secret (VSCO) Expected to Beat Earnings Estimates: What to Know Ahead of Q1 Release

Victoria's Secret (VSCO) is expected to report Q1 2025 earnings on June 5th, with consensus estimates projecting a 66.7% year-over-year decline in EPS to $0.04 on revenues of $1.33 billion, a 2.1% decrease. However, the consensus EPS estimate has been revised upwards by 7.02% in the last 30 days, resulting in a positive Earnings ESP of +54.55% and a Zacks Rank #3, suggesting a likely earnings beat; the company has surpassed EPS estimates in each of the last four quarters.

Analysis

Victoria's Secret (VSCO) is anticipated to report its Q1 2025 earnings on June 5th, with Wall Street consensus projecting a significant year-over-year decline. Expected earnings per share (EPS) are $0.04, a 66.7% decrease, on revenues of $1.33 billion, down 2.1% from the prior year. Despite this challenging outlook, there are indicators suggesting a potential positive surprise. The consensus EPS estimate has seen an upward revision of 7.02% over the last 30 days. More notably, Victoria's Secret exhibits a strong Zacks Earnings ESP (Expected Surprise Prediction) of +54.55%, which, combined with its current Zacks Rank #3 (Hold), indicates a high probability of exceeding the consensus EPS estimate; historical data suggests stocks with this combination achieve a positive surprise nearly 70% of the time. This is further supported by VSCO's track record of surpassing EPS estimates in all of the last four quarters, including a +13.04% surprise in the most recently reported quarter. While an earnings beat seems likely, the sustainability of any resultant stock price movement will heavily depend on management's commentary regarding prevailing business conditions and future guidance. In contrast, industry peer Genesco (GCO) faces a more uncertain earnings outlook, with downward EPS estimate revisions and a negative ESP of -2.80%, despite a Zacks Rank #2 (Buy), making an earnings beat less predictable.

Key Decisions for Investors

• Consider that Victoria's Secret is a compelling candidate for an EPS beat in its upcoming Q1 2025 report, given its positive Earnings ESP of +54.55% and Zacks Rank #3, alongside a history of outperforming estimates.
• Investors should scrutinize management's discussion on the earnings call for insights into the drivers behind the expected year-over-year declines in revenue and earnings, and any strategies to address these fundamental challenges.
• While a near-term positive stock reaction to an earnings beat is possible, focus on the company's forward-looking guidance and commentary on market conditions to assess the sustainability of any price appreciation and the longer-term investment thesis.