Victoria’s Secret shoppers who wait each year for deep holiday discounts may be a little disappointed this season, as the lingerie retailer’s products are selling more often at full price. For this reason, Wall Street expects the company to rely less on promotions in November and December.
In a Bank of America research note shared with me, analyst Mary Sport downgraded Victoria’s Secret & Co. (VSXY) stock to Hold from Buy. The call was based on the company’s valuation, and although she downgraded the stock, she also raised her price target to $112 from $95. The downgrade sent shares down 4.4% that day, closing at $105.01.
If a brand has good momentum, that usually takes the pressure off a store to cut prices during the holiday rush. Victoria’s Secret appears to be following that pattern right now, and it changes what shoppers should expect at its stores over the next six weeks.
A brand revival that is changing how products get priced
Victoria’s Secret has stores, outlets, and an online store that sells bras, panties, sleepwear, beauty products, and swimwear under the Victoria’s Secret and PINK brands. Its holiday performance usually depends on steep discounts to pull in customers, but that pattern is now shifting. The brand is winning back shoppers’ attention with new product designs and momentum from its Fashion Show.
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Sport wrote in the BofA research note that “recent brand heat” should drive “strong full-price sales through holiday.” Because of that, she raised her full-year gross margin forecast by 50 basis points, and expects an increase of 250 basis points for fiscal year 2026. That means the company is now keeping more profit from every dollar it earns than it did a year ago.
The Fashion Show effect is spilling into holiday carts
The Victoria’s Secret Fashion Show returned on October 18, 2026, at Sony Pictures Studios in the Los Angeles area. The show drew about 3.64 million viewers across its livestreams. That’s nearly 33% more than last year, according to Streams Charts. Sport said the event created a “halo effect through the holiday.” She also raised the company’s same-store sales estimates for the third and fourth quarters to 9% and 6%, up from 8% and 5%, respectively.
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The show’s viewership is great exposure for the bra category, which has become the company’s main growth engine. CEO Hillary Super said on the second-quarter earnings call transcribed by Investing.com that the bra business grew in the mid-teens and drove about half of the Victoria’s Secret brand’s overall growth.
“Our bra business grew in the mid teens driven by strength in core franchises and by new innovation,” Super said. That kind of demand reduces the need for the company to run deep discounts into Black Friday and Cyber Monday.
Why Bank of America moved to Hold
Victoria’s Secret stock price has increased about 25% over the past month, while the S&P 500 fell about 2%, Yahoo Finance reported. That means much of the good news is already priced in. Even though Sport’s team raised Victoria’s Secret’s 2026 and 2027 earnings per share estimates by 13% and 11%, to $5.28 and $6.81, they still downgraded the stock.
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Her 2027 estimate is 20% higher than Wall Street’s consensus, and Sport argued that further gains would be harder to justify without operating margins reaching the low teens. She acknowledges the possibility over time, but feels it is unlikely in fiscal 2027. The reason is that freight costs could climb again, which would reduce some of the margin gains, and only half of store remodels will be complete by the end of fiscal 2027.
What investors and shoppers should watch next
Victoria’s Secret has rebuilt momentum, yet it seems like the easiest gains have already been made. New investors should focus on the company’s fiscal 2026 fourth-quarter and fiscal 2027 first-quarter earnings calls. That should reveal whether freight pressure is cutting into margins.
Shoppers who usually wait for Victoria’s Secret discounts may want to buy earlier this year. BofA expects promotions to be lower this season than in past holidays. That is good news for VSXY shareholders, but a tough one for bargain hunters.
