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

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.
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