Crispr Therapeutics shares tumble after significant earnings miss
TD Cowen reduced its price target on Victoria’s Secret (NYSE:VSCO) stock to $22.00 from $25.00 on Thursday, while maintaining a Hold rating on the retailer’s shares. The stock, currently trading at $19.06 with a market cap of $1.58 billion, has declined over 52% year-to-date. According to InvestingPro data, the company trades at a P/E ratio of 10.15x.
The firm cited worse-than-expected gross margin compression in the first quarter of 2025, which was partially offset by lower selling, general and administrative expenses due to a shift in marketing spend from the first quarter into the second quarter. The company’s gross profit margin stands at 36.69%, while nine analysts have recently revised their earnings expectations downward, as revealed by InvestingPro analysis.
TD Cowen noted several bright spots in Victoria’s Secret’s business, including strong performance in PINK apparel, beauty products, and VSX activewear lines, but indicated the company’s core intimates business "needs more work." Despite challenges, the company maintains profitability with $586.29 million in EBITDA for the last twelve months. Get deeper insights into VSCO’s business performance with InvestingPro’s comprehensive research report, available along with 10+ additional ProTips.
The research firm expressed concern that while traditional promotions decreased, increased "gift with purchase" offers pressured gross margins, and the company’s semiannual sales this year showed double-digit unit declines.
TD Cowen analysts also pointed to potentially challenging second-half comparisons against 2024, given "the huge success of the fashion show from last year," and based their new $22 price target on a multiple of 9 times fiscal 2027 projected earnings.
In other recent news, Victoria’s Secret reported a strong financial performance for the first quarter of 2025, surpassing earnings expectations with an earnings per share (EPS) of $0.09, significantly higher than the forecasted $0.0217. The company’s revenue reached $1.35 billion, slightly above the anticipated $1.32 billion. Despite these positive results, the company maintained its fiscal year sales guidance of $6.2-6.3 billion. However, it lowered its earnings per share forecast to $1.80-2.20 from the previous $2.00-2.45 range due to ongoing challenges, including tariff pressures. Analyst firms have shown differing perspectives, with UBS maintaining a Neutral rating and a $24 price target, noting early signs of growth stabilization, while BofA Securities lowered its price target to $18, maintaining an Underperform rating due to concerns over sales growth and margin expansion. The company continues to face gross margin pressures, with a decline of 170 basis points reported, despite achieving an adjusted operating income of $32 million. Victoria’s Secret is focusing on marketing optimization and product innovation, with new launches anticipated in the beauty and swim categories as part of its strategic initiatives.
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