VSCO Q3 2025 Earnings: International Momentum and Narrowing Losses

Victoria’s Secret & Co. (VSCO) is attempting one of the most visible brand transformations in modern retail history. Moving away from the "Angels" era, the company—which includes its namesake brand, the youth-focused PINK, and the digitally-native Adore Me—is adapting to a consumer landscape that prioritizes inclusivity and comfort. To see if this strategic pivot is delivering financial results, we need to look past the marketing and dive into the hard numbers provided in their latest 10-Q filing.

Visualizing the Quarter

To understand how revenue flows through the company to the bottom line, the following Sankey diagram visualizes the income statement for the third quarter of 2025:

Top-Line Growth and International Momentum

The headline for the third quarter of 2025 is a return to solid growth. VSCO reported total net sales of $1.47 billion, a 9% increase over the $1.35 billion reported in the same quarter last year.

The primary driver of this surge was the International business segment. Revenue for this specific division jumped 34% to $265 million. It is important to distinguish this reporting segment (which largely consists of royalties, wholesale, and franchise operations) from the broader geographic breakdown. When looking at all sales occurring geographically outside of the U.S. (which encompasses the International segment plus company-operated stores in Canada), the figure stands at $305 million. Regardless of how you slice the data, the appetite for the brand globally is outpacing domestic growth.

That said, the core North American market remains resilient. Stores – North America generated $778 million, up 5% year-over-year. This growth in brick-and-mortar sales suggests that despite the broader challenges in physical retail, the in-store experience remains a vital touchpoint for intimate apparel.

Narrowing the Loss

While the company is growing sales, it is still operating at a loss for the quarter, though the financial picture is improving significantly.

• Net Loss: VSCO reported a net loss of $31 million ($0.46 per share), a distinct improvement from the $55 million loss ($0.71 per share) reported in Q3 2024.
• Operating Loss: The operating loss—which focuses purely on business operations before interest and taxes—narrowed to $19 million, compared to $47 million the previous year.

This improvement demonstrates "operating leverage." By increasing sales by roughly $125 million while keeping General, Administrative and Store Operating Expenses ($555 million) and COGS relatively controlled, the company was able to cover more of its fixed costs.

Margins and Competition

The company achieved a Gross Profit of $536 million, resulting in a gross margin of roughly 36.4%. Maintaining healthy margins is critical in the apparel industry, especially given the costs associated with rebranding.

Selling and Marketing expenses (specifically Advertising and Marketing) were $152 million. This indicates that VSCO is continuing to invest heavily in customer acquisition and brand messaging to compete with rivals. The intimate apparel space has become crowded, with American Eagle’s Aerie capitalizing on the body-positivity movement and Savage X Fenty leveraging celebrity influence.

Conclusion

The Q3 2025 results indicate that Victoria’s Secret & Co. is stabilizing the ship. The growth in North American stores provides a steady foundation, while the surge in the International segment offers a compelling growth story. Although the company remains in the red for the quarter, the narrowing losses suggest that the turnaround strategy is gaining traction. The challenge moving forward will be to maintain this sales momentum through the critical holiday season and translate top-line growth into consistent profitability.