Can Victoria's Secret's Path to Potential Sustain Brand Momentum?

Victoria’s Secret & Co. VSXY is now more than a year into its Path to Potential strategy, with management highlighting continued momentum and increasingly focused, agile execution. The strategy is centered on strengthening customer relationships and reinforcing the foundation of the business. The company said that these efforts are strengthening execution and customer connections while supporting its goal of creating sustainable, long-term value as the strategy progresses.

A key focus is strengthening customer connections and building a stronger foundation for sustainable long-term value. World Building is an important part of this effort, creating distinct and emotionally resonant ecosystems for the VS and PINK brands. By bringing together product, marketing, customer experience and visual identity, the company is developing clear and recognizable brand identities designed to create more immersive customer experiences.

The Path to Potential strategy continues to drive momentum across the business, giving the company confidence in the remainder of the year. The company also has a strong pipeline of upcoming product launches, including more bra launches for both brands than it had last year. The planned launches underscore the company’s continued emphasis on product newness as it advances the Path to Potential strategy.

Additionally, VSXY has a robust calendar of collaborations, partnerships and high-impact brand moments ahead, including the return of the fashion show, with Angels Among Us extending the initiative around the event. Overall, Victoria’s Secret’s strategic transformation could strengthen brand relevance and customer loyalty, while continued innovation and high-profile engagement opportunities may provide additional catalysts for sustained momentum.

The Zacks Rundown for VSXY

Shares of this Zacks Rank #2 (Buy) company have gained 37.1% in the past six months against the industry’s decline of 15.7%.

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From a valuation standpoint, VSXY trades at a forward price-to-earnings ratio of 16.31, higher than the industry’s average of 13.51.

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The Zacks Consensus Estimate for VSXY’s current and next fiscal year earnings implies a year-over-year rise of 55.7% and 19.1%, respectively.

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Other Stocks to Consider

Some other top-ranked stocks have been discussed below:

FIGS, Inc. FIGS operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. At present, FIGS carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for FIGS’s current fiscal-year sales and earnings implies growth of 18.2% and 57.9%, respectively, from the year-ago figures. FIGS has delivered a trailing four-quarter earnings surprise of 201.8%, on average.

Fossil Group, Inc. FOSL designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. At present, FOSL carries a Zacks Rank of 2.

The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.

Boot Barn Holdings, Inc. BOOT operates specialty retail stores in the United States and internationally. At present, Boot Barn carries a Zacks Rank of 2.

The consensus estimate for Boot Barn’s current fiscal-year sales and earnings implies growth of 15.7% and 22.6%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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