Victoria’s Secret (NYSE:VSCO) stock got a boost from management’s Q3 guidance update. Citing the quarter-to-date trends, VSCO’s management said that Q3 operating income would come near the high end of its previously provided guidance range of $10 million to $40 million. Moreover, VSCO’s earnings are forecasted to be at the high end of its earlier guidance of $0.00 to $0.25 per share.
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While operating income and earnings are expected to come in near the higher end of their earlier forecast, sales will decline by a high-single-digit rate. Soft customer traffic amid weakness in the broader retail environment and inflationary pressures will likely hurt its top line.
Though the specialty retailer faces near-term headwinds, its brand recovery efforts, new products and partnerships, and increased digital penetration will support long-term growth.
Is VSCO a Good Stock to Buy?
VSCO stock is down more than 35% year-to-date. However, with the ongoing sales and margin headwinds, analysts remain cautiously optimistic about VSCO stock. It commands a Moderate Buy rating consensus on TipRanks based on four Buy and three Hold recommendations. Further, these analysts’ average price target of $44.86 implies 25.3% upside potential.
TipRanks’ data shows that hedge funds sold 7.3M Victoria’s Secret stock last quarter. However, insiders added VSCO stock worth $102.3K during the same period.
VSCO stock has a Neutral Smart Score of five out of 10.
