Share count
83Mpeak FY2022
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VSCO, Victoria's Secret
Victoria's Secret is a specialty retailer of women's intimates and other apparel and beauty products marketed under the Victoria's Secret, PINK and Adore Me brand names.
We have approximately 860 stores in the United States ("U.S."), Canada and China, as well as our own websites, www.
We operate as a single segment designed to seamlessly serve customers worldwide through stores and digital channels.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2026
$6.6B
+5.2% YoY · 4% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $6.8B 5-yr avg $6.4B
Revenue $1.6B +15.3% vs yr-ago qtr
Operating margin 4.9% yr-ago 1.5%
Net income $57M yr-ago $3M
Net margin 3.7% yr-ago 0.2%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
- What moves the needle
- Gross margin has run about 36% and operating margin about 4.1% through the cycle, a solid spread between what it charges and what the product costs to make. The operating margin has swung widely — from −12% to 13% — on a steadier 36% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Inventory runs near 15% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has run in the teens (median 17%, above 15% in 5 of 7 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 4% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →18% of revenue comes from outside the United States.
Revenue by geography, FY2026
- United States82%$5.4B
- International18%$1.2B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2020–2026
realized figures from each filing · older years to the left| 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | 2026’26 | TTMTTMMay 2026 | |
|---|---|---|---|---|---|---|---|---|
| Income statement | ||||||||
| $7.5B | $5.4B | $6.8B | $6.3B | $6.2B | $6.2B | $6.6B | $6.8B | RevenueRevenue |
| 27% | 29% | 41% | 36% | 36% | 37% | 36% | 37% | Gross marginGross mgn |
| 30% | 31% | 28% | 28% | 32% | 32% | 32% | 32% | SG&A / revenueSG&A/rev |
| ($892M) | ($101M) | $870M | $478M | $246M | $310M | $271M | $327M | Operating incomeOp. inc. |
| −11.9% | −1.9% | 12.8% | 7.5% | 4.0% | 5.0% | 4.1% | 4.8% | Operating marginOp. mgn |
| ($897M) | ($72M) | $646M | $348M | $109M | $165M | $161M | $211M | Net incomeNet inc. |
| — | — | 23% | 19% | 22% | 24% | 11% | 10% | Effective tax rateTax rate |
| Cash flow & returns | ||||||||
| $315M | $674M | $851M | $437M | $389M | $425M | $499M | $512M | Operating cash flowOp. cash |
| $411M | $326M | $303M | $274M | $284M | $258M | $238M | $230M | DepreciationDeprec. |
| $763M | $395M | ($131M) | ($233M) | ($60M) | ($58M) | $45M | $17M | Working capital & otherWC & other |
| $225M | $127M | $169M | $164M | $256M | $178M | $187M | $198M | CapexCapex |
| 3.0% | 2.3% | 2.5% | 2.6% | 4.1% | 2.9% | 2.9% | 2.9% | Capex / revenueCapex/rev |
| $90M | $547M | $682M | $273M | $133M | $247M | $312M | $314M | Owner earningsOwner earn. |
| 1.2% | 10.1% | 10.1% | 4.3% | 2.2% | 4.0% | 4.8% | 4.6% | Owner earnings marginOE mgn |
| $90M | $547M | $682M | $273M | $133M | $247M | $312M | $314M | Free cash flowFCF |
| 1.2% | 10.1% | 10.1% | 4.3% | 2.2% | 4.0% | 4.8% | 4.6% | Free cash flow marginFCF mgn |
| — | $0 | $0 | $369M | $0 | $0 | $0 | $0 | AcquisitionsAcquis. |
| $0 | $0 | $250M | $250M | $125M | $0 | $0 | — | BuybacksBuybacks |
| -66% | -12% | 89% | 32% | 15% | 17% | 18% | 19% | ROICROIC |
| -68% | -8% | 251% | 91% | 26% | 26% | 19% | 27% | Return on equityROE |
| −68% | −8% | 251% | 91% | 26% | 26% | 19% | 27% | Retained to equityRetained/eq |
| Balance sheet | ||||||||
| $245M | $335M | $490M | $427M | $270M | $227M | $518M | $207M | Cash & investmentsCash+inv |
| — | $121M | $162M | $141M | $152M | $159M | $186M | $185M | ReceivablesReceiv. |
| — | $701M | $949M | $1.1B | $985M | $955M | $1.1B | $1.1B | InventoryInvent. |
| — | $338M | $538M | $481M | $513M | $419M | $493M | $412M | Accounts payablePayables |
| — | $484M | $573M | $712M | $624M | $695M | $764M | $871M | Operating working capitalOper. WC |
| — | $1.2B | $1.7B | $1.7B | $1.5B | $1.4B | $1.9B | $1.6B | Current assetsCur. assets |
| — | $1.6B | $1.7B | $1.6B | $1.6B | $1.4B | $1.5B | $1.3B | Current liabilitiesCur. liab. |
| — | 0.8× | 1.0× | 1.1× | 0.9× | 1.0× | 1.2× | 1.3× | Current ratioCurr. ratio |
| — | — | $0 | $365M | $367M | $367M | $367M | $367M | GoodwillGoodwill |
| — | $4.2B | $4.3B | $4.7B | $4.6B | $4.5B | $5.0B | $4.8B | Total assetsAssets |
| — | $97M | $982M | $1.3B | $1.1B | $977M | $975M | $990M | Total debtDebt |
| — | ($238M) | $492M | $848M | $854M | $750M | $457M | $783M | Net debt / (cash)Net debt |
| -111.5× | -16.8× | 32.2× | 8.0× | 2.5× | 3.6× | 3.9× | 4.8× | Interest coverageInt. cov. |
| $1.3B | $891M | $257M | $383M | $417M | $640M | $856M | $790M | Shareholders’ equityEquity |
| 0.5% | 0.5% | 0.5% | 0.8% | 0.9% | 1.0% | 0.8% | 0.8% | Stock comp / revenueSBC/rev |
| Per share | ||||||||
| 88.0M | 88.0M | 90.0M | 84.0M | 79.0M | 81.0M | 83.0M | 85.0M | Shares out (diluted)Shares |
| $85.33 | $61.51 | $75.39 | $75.52 | $78.25 | $76.91 | $78.95 | $79.53 | Revenue / shareRev/sh |
| $-10.19 | $-0.82 | $7.18 | $4.14 | $1.38 | $2.04 | $1.94 | $2.48 | EPS (diluted)EPS |
| $1.02 | $6.22 | $7.58 | $3.25 | $1.68 | $3.05 | $3.76 | $3.69 | Owner earnings / shareOE/sh |
| $1.02 | $6.22 | $7.58 | $3.25 | $1.68 | $3.05 | $3.76 | $3.69 | Free cash flow / shareFCF/sh |
| $2.56 | $1.44 | $1.88 | $1.95 | $3.24 | $2.20 | $2.25 | $2.33 | Cap. spending / shareCapex/sh |
| $14.93 | $10.13 | $2.86 | $4.56 | $5.28 | $7.90 | $10.31 | $9.29 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 6-yr | 5-yr | |
|---|---|---|
| Revenue / share | −1.3%/yr | +5.1%/yr |
| Owner earnings / share | +24.2%/yr | −9.6%/yr |
| Capital spending / share | −2.1%/yr | +9.3%/yr |
| Book value / share | −6.0%/yr | +0.4%/yr |
The record, charted
FY2020–2026Each measure over its full record; the current point and the worst year marked.
ROIC
18%low FY2020
Gross margin
36%low FY2020
Net debt ÷ owner earnings
1.5×peak FY2024
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$312Mowner earningsvs.$161Mnet incomelow FY2020
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cashEach year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.
FY2020FY2026
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2026 the business turned $161M of profit into $312M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Reported net income | $161M | $165M | $109M | $348M | $646M |
| Depreciation & amortizationnon-cash charge added back | +$238M | +$258M | +$284M | +$274M | +$303M |
| Stock-based compensationreal costnon-cash, but a real cost | +$55M | +$60M | +$56M | +$48M | +$33M |
| Working capital & othertiming of cash in and out, other non-cash items | +$45M | −$58M | −$60M | −$233M | −$131M |
| Cash from operations | $499M | $425M | $389M | $437M | $851M |
| Capital expenditurecash put back in to keep running and to grow | −$187M | −$178M | −$256M | −$164M | −$169M |
| Owner earnings | $312M | $247M | $133M | $273M | $682M |
| Owner-earnings marginowner earnings ÷ revenue | 5% | 4% | 2% | 4% | 10% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $55M), owner earnings is nearer $257M.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2026 10-K · source on SEC EDGAR →
Will it survive?
- AdequateOperating income $271M ÷ interest expense $70M
What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- How heavy is the debt, net of cash? $457M · 1.7× operating profitModest net debtCash $518M − debt $975M
What this means
Netting $518M of cash and short-term investments against $975M of debt leaves $457M owed, about 1.7× a year's operating profit (3.6× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Long (60+ days)DSO 10 + DIO 94 − DPO 43 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- High through the cycle7-yr median, range -66%–89%; 18% latest = NOPAT $242M ÷ invested capital $1.3BIndustry peers: median 16%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 7 years (it ran 18% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Thin through the cycle7-yr median margin, range 1%–10%; latest $312M = operating cash $499M − maintenance capex $187MIndustry peers: median 6%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 5% of revenue this year, a 4% median across 7 years. Treating stock comp as the real expense it is (less $55M of SBC) leaves $257M.
- Cash-backedCash from ops $499M ÷ net income $161M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Reinvests most of itDividends + buybacks $0 ÷ Owner Earnings $312M
What this means
Of $312M Owner Earnings, $0 (0%) went back to shareholders, $0 dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 0.79×HarvestingCapex $187M ÷ depreciation $238M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 1 of 5 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size PassRevenue ≥ $2B · $6.6B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.25×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $975M vs $376M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability MissA profit every year (7-yr record) · 2 loss years
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · none paid
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth —Earnings +33% over the record · —
What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $1.82/share (latest year $2.03), the averaged base the calculator's gate runs on, and book value is $10.77/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2020–2026
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 5 of 7
What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 5 of 6 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin −0% → 4% (3-yr avg ends)
What this means
Through the cycle the operating margin widened — about −0% early to 4% lately, median 4% — pricing power intact or improving.
- Reinvestment, incremental ROIC 59%
What this means
Every extra dollar the business reinvested came back at a high incremental return — the lens GBM read for a moat that reinvests rather than merely harvests. The record and the 10-K are where you check whether the rate holds.
- Owner earnings growth −2%/yr
What this means
Owner earnings shrank about 2% a year over the record.
- Worst year 2020 · −11.9% op. margin
What this means
Operations went underwater in 2020, understand why before trusting the good years.
- Share count −1.0%/yr
What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
- How management talks about it Promotional
What this means
The returns have faded, yet the filing reaches for a promoter’s vocabulary — world-class, best-in-class, disruptive — more than an owner’s. When the words sell harder than the results deliver, the gap is the thing to weigh.
Does AI threaten the moat?
Moderate contestabilityAI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.
In its own filing Named as a competitive risk
Its FY2026 10-K names artificial intelligence as a competitive threat.
“If the work product that AI or similar technological applications assist in producing is deficient, inaccurate or misleading, we could be subject to competitive harm, legal liability, regulatory action, and brand or reputational harm.”
The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, May 2, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$1.6B
- Cash & short-term investments$207M
- Receivables$185M
- Inventory$1.1B
- Other current assets$136M
Current liabilities$1.3B
- Debt due within a year$4M
- Accounts payable$412M
- Other current liabilities$870M
Current ratio1.26×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.41×stricter: inventory excluded
Cash ratio0.16×strictest: cash alone against what's due
Working capital$340Mthe cushion left after near-term bills
Debt due this year vs. cash$4M due · $207M cash
covered by cash on hand, no refinancing forced · both figures from the May 2, 2026 balance sheet
Revenue, latest quarter vs. a year ago+15.3%the freshest read on whether the business is still growing
Current ratio, recent quarters1.0× → 1.3×
Deeper floors
Tangible book value$293Mequity stripped of goodwill & intangibles
Net current asset value($2.3B)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$2.9B$1.9B of it operating leases; with finance leases, “total fixed claims” below reaches $2.8B (annual-report basis)
From the company's latest filing.
Debt maturity
the debt note, SEC EDGAR →Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.
Bars scaled to the largest single year.
Due in the next 12 months$4Mthe first rung: what must be repaid or rolled over within the year
Within two years$8Mthe near wall, the part most exposed to today’s credit conditions
Biggest single year$600Min 2029the lumpiest maturity, where a refinancing, if needed, is largest
Due over the next five years$983Mthe near slice; the balance sheet carries $975M of debt in all
Against what the business has and earns
Cash & short-term investments, May 2, 2026$207M
One year of owner earnings (FY2026)$312M
Together, against $4M due next year129.8×
Cash on hand as of May 2, 2026 plus a year’s owner earnings comes to $519M against the $4M due in the twelve months after the Jan 31, 2026 schedule: 130 times it.
Maturity schedule extracted from the company’s Jan 31, 2026 annual report and reconciled to the balance-sheet debt.
Lease obligations
the lease note, SEC EDGAR →Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, and what it adds to the debt on the page above.
Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.
Due in the next 12 months$411Ma fixed cash payment, owed whether or not the business has a good year
Total lease payments$2.4Bevery year plus the tail, undiscounted: the full cash the leases will take
On the balance sheet$1.9Bthe present value of those payments, the recognised lease liability
True leverage: debt plus leases
On-balance-sheet debt$975M
Lease obligations (present value)$1.9B
Total fixed claims on the business$2.8B
Counting the leases the way Buffett does, the fixed claims on this business come to $2.8B, of which the leases are 66%, more than the debt itself. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.
Lease ladder read from the ASC 842 tags in the company’s Jan 31, 2026 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.
How the cash was used, 2020–2026
Over the record, the business generated $3.6B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.
- Reinvested$1.3B · 36%
- Buybacks$625M · 17%
- Retained (debt / cash)$1.7B · 46%
- Returned to owners$625M
27% of the owner earnings the business produced over the span, $0 as dividends and $625M as buybacks.
- Average price paid for buybacks—
Buybacks ran $625M over the span, but the filings don't tag the share count needed to deduce the average price paid.
- Net change in share count−3.4%
The diluted count fell from 88M to 85M, so the buybacks outran the stock issued to staff.
- Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Acquisitions & goodwill
from the balance sheet & the 7-year cash-flow recordGoodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.
Goodwill & intangibles$497M10% of all assets; the premium carried on the balance sheet for businesses acquired
Against book equity43%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital
Cash spent acquiring$370Mover 7 years buying other businesses, against $1.3B of capital spent building
$720M written down across 1 year (2020): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.
Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 7-year record, from the company's own filings.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Pay, as filed | “Actually paid” | Owner earnings |
|---|---|---|---|
| 2022 | $12.9M | $27.9M | $682M |
| 2023 | $12.5M | −$3.3M | $273M |
| 2024 | $10.9M | $1.6M | $133M |
| 2025 | $8.5M | $11.4M | $247M |
| 2025 | $12.8M | $6.8M | $247M |
| 2026 | $14.4M | $43.9M | $312M |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.
- Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- CEO pay ratio1,360:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
- Stock-based compensation$55M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 20% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Inverting the record
Invert: instead of why Victoria's Secret is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2020–2026.
1 of the 4 tests turned up something to look into; the other 3 came back clean.
- Look hereIs it less profitable than it was?3.6% vs 7.1%
The owner-earnings margin averaged 7.1% early in the record and 3.6% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
And these came back clean
- Did the share count rise anyway?
- Did reported profit become cash?
- Are "one-time" charges a yearly habit?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
Peers, Specialty Retail
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| JWNNordstrom | $15.0B | — | 4.2% | 15% | 4% |
| FLFoot Locker | $8.0B | 32% | 7.3% | 17% | 6% |
| VSCOVictoria's Secret | $6.6B | 36% | 4.1% | 17% | 4% |
| URBNUrban Outfitters | $6.2B | 33% | 7.9% | 16% | 7% |
| AEOAmerican Eagle | $5.5B | 37% | 6.7% | 21% | 5% |
| ANFAbercrombie & Fitch | $5.3B | 73% | 3.5% | 12% | 6% |
| HBIHanesbrands | $3.5B | 38% | 9.3% | 16% | 8% |
| DBIDesigner Brands Inc. | $2.9B | 30% | 3.0% | 18% | 3% |
| Group median | — | 36% | 5.4% | 17% | 5% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Victoria's Secret has delivered.
$
Through the cycle, Victoria's Secret earns about $282M on its 4.3% median owner-earnings margin. This year’s 4.8% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’22→’26−13%/yr
Owner-earnings growth · ’20→’26−2%/yr
Owner-earnings growth · ’20→’26−2%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’24–’26)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $314M on 79M shares outstanding, per the 10-Q cover, as of 2026-05-29; net debt $783M. The if-converted diluted count is 85M, 7% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Victoria's Secret (VSCO), the owner's record," https://ownerscorecard.com/c/VSCO, data as of 2026-07-09.
Manual order: ← VSAT its page in the Manual VSEC →
Industry order: ← URBN the Specialty Retail chapter VSXY →