VSCO

Victoria's Secret ($VSCO) Major Shareholder Bets on Turnaround with $23.6 Million Stock Purchase Following Price Plunge

03/28/2025 20:41

Victoria's Secret ($VSCO) is drawing investor attention as a major shareholder has made substantial stock purchases following a dramatic price decline. According to recent SEC filings, BBRC International, a major shareholder in Victoria's Secret, purchased approximately 1.36 million shares worth about $23.6 million between March 10 and March 27, 2025. These aggressive buys occurred after the stock had plummeted more than 60% from its January peak, signaling strong confidence in the company's long-term value. Victoria's Secret stock has exhibited extreme volatility over the past nine months. Starting around $16 in July 2024, it surged to a high of $48.71 in mid-December—a gain of over 200%—before crashing back to the $16 range by early March 2025. The timing of these major insider purchases at this low point is particularly noteworthy. BBRC International's buying spree came shortly after Victoria's Secret reported its Q4 fiscal 2024 results on March 5, which showed relatively solid performance with revenue of $2.11 billion (a 1% year-over-year increase), but was followed by disappointing Q1 guidance. The company projected Q1 sales between $1.30 billion and $1.33 billion, below analyst expectations of $1.39 billion, citing unseasonal weather challenges. The lingerie retailer has been working on brand repositioning and operational improvements in recent years. In August 2024, Morgan Stanley upgraded the stock, citing leadership changes under CEO Hillary Super and turnaround expectations. The company also streamlined its organizational structure in September 2024 by eliminating the roles of Brand President and Chief Customer Officer. Financially, Victoria's Secret has shown signs of sequential improvement. For fiscal year 2024, the company reported revenue of $6.18 billion and net income of $165 million ($2.05 per share). The fourth quarter showed positive momentum with comparable sales increasing by 5%, and annual sales are projected between $6.2 billion and $6.3 billion, slightly above analyst expectations of $6.21 billion. Victoria's Secret operates 1,387 stores and maintains a significant position in the U.S. women's underwear market. However, it faces intense competition from brands like American Eagle's Aerie, Savage X Fenty, and other emerging players in the intimate apparel space. The company continues to focus on brand transformation and product innovation to stay competitive. In late January, the company announced that CFO Timothy Johnson would retire in June, with Scott Sekella, former CFO of Joann, appointed as his successor. This leadership transition comes at a critical time in the company's transformation journey. BBRC International's substantial investment during this transitional period demonstrates confidence in Victoria's Secret, particularly notable given the recent negative market sentiment. The shareholder purchased 542,000 shares on March 10 and 480,000 shares on March 11, followed by approximately 339,000 additional shares between March 12 and March 27. This cluster buying by a major shareholder occurred as Victoria's Secret was showing gradual performance improvements, potentially signaling that despite short-term challenges, the company represents long-term value. Indeed, the stock has rebounded over 25% from its early March lows of around $16 to approximately $20 by late March. Barclays upgraded Victoria's Secret stock to 'overweight' in late January, identifying three critical catalysts: improved full-price selling, sales growth, and a favorable sales-to-inventory ratio. JP Morgan also upgraded the stock to 'neutral' in December and raised its price target from $29 to $45. Victoria's Secret's future success will depend on how effectively it can reposition its brand, innovate its product offerings, and respond to changing consumer preferences. BBRC International's significant stock purchases serve as a strong indicator that insiders are betting on the company's future during this transformation period.

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