Victoria's Secret May Continue To Be Affected By Inflation, Says This Analyst

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  • Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Victoria’s Secret & Co VSCO with a price target of $35.00.
  • The analyst said VSCO reported Q2 EPS above Street view, driven by tighter cost control as sales and gross margin came in below expectations.
  • VSCO pointed to the increasing impact from macro/inflationary pressures in Q2, not unexpectedly, the analyst noted.
  • As a result of the slowing topline environment, Victoria’s increased promotional activity, which the analyst expects, will weigh on margins going forward. 
  • The analyst thinks that persistent near-term headwinds continue to weigh and visibility to improvement remains challenging, despite VSCO's efforts to strengthen the business, including recent announcement on job cuts.
  • Price Action: VSCO shares are trading lower by 0.82% at $38.03 on the last check Thursday.
  • Photo Via Wikimedia Commons
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