VSCO

Victoria's Secret ($VSCO) Major Shareholder Buys $33.4 Million in Shares Following Stock Plunge

04/01/2025 20:23

A major shareholder's substantial stock purchases at Victoria's Secret ($VSCO) are drawing attention amid the company's performance challenges and stock decline. BBRC International has acquired nearly 2 million shares worth approximately $33 million in just the past month. Victoria's Secret's stock has experienced extreme volatility recently. In early December 2024, the share price peaked above $48, marking a 52-week high, but by early March 2025, it had plummeted to around $17 – representing a decline of over 65% in just six months. This sharp drop resulted from both broader market corrections and the company's disappointing first-quarter outlook. Immediately following this price collapse, BBRC International began aggressive purchasing. According to SEC filings, BBRC bought 542,000 shares (approximately $9.39 million) on March 10, 480,000 shares (about $7.93 million) on March 11, and approximately 130,000 additional shares (roughly $2.19 million) on March 12-13. The buying continued in late March with another 793,000 shares (about $14.87 million) purchased between March 26-28. This totals approximately 1,945,000 shares, representing an investment of around $33.4 million. This substantial insider buying can be interpreted as a strong vote of confidence from the major shareholder that the current stock price is undervalued. The concentrated purchasing immediately after the stock's steep decline is particularly notable. Victoria's Secret has shown mixed results in recent performance. In fiscal Q4 2024 results (November 2024-January 2025) announced on March 5, 2025, the company reported earnings per share of $2.60, exceeding analysts' expectations of $2.30. Revenue increased by 1.1% to $2.11 billion compared to the same period last year, with comparable sales growing by 5%. However, the issue arose with the company's Q1 2025 outlook. Victoria's Secret projected first-quarter sales between $1.30 billion and $1.33 billion, significantly below Wall Street analysts' expectations of $1.39 billion. The company cited factors such as unseasonable weather for the disappointing forecast. Following this announcement, the stock dropped 5.8% in a single day and continued its downward trend. Victoria's Secret has been undergoing leadership changes and business restructuring in recent years. In September 2024, the company eliminated the Brand President and Chief Customer Officer positions. In January 2025, CFO Timothy Johnson announced his retirement effective June, with Scott Sekella, former CFO of Joann, named as his successor. CEO Hillary Super has been focusing on revamping the company's product lines and marketing strategies. These efforts have shown some positive results, with JP Morgan upgrading the stock in December 2024 from 'underweight' to 'neutral' and raising its price target from $29 to $45. Barclays upgraded Victoria's Secret from 'equal weight' to 'overweight' in January 2025, citing improved full-price selling, sales growth, and a favorable sales-to-inventory ratio. The specialty apparel retail sector in which Victoria's Secret operates continues to face challenges from changing consumer preferences and intensified online competition. Recent reports suggest that consumers are still spending on popular non-essential items. Newer competitors like Skims have been gaining market share, particularly among younger consumers, prompting Victoria's Secret to continue efforts to modernize its brand positioning. Financially, Victoria's Secret trades at a relatively low P/E ratio of 9.32, which may appear attractive to some investors. The company reported revenue of $6.18 billion and net income of $109 million for fiscal year 2024. However, the company carries $2.7 billion in debt, which could represent a financial burden. Looking forward, Victoria's Secret's performance will depend on how well it adapts to the changing retail environment and successfully implements new product and marketing strategies to attract younger consumers. BBRC International's substantial purchases suggest that the major shareholder maintains confidence in the company's long-term prospects. In the short term, industry-wide consumer spending weakness and the projected revenue decline in Q1 may continue to pressure the stock. However, BBRC's substantial buying signals that the share price may be undervalued at current levels, potentially offering an entry opportunity for long-term investors. Investors should closely monitor Victoria's Secret's performance and management's execution of strategies in the coming months. The Q1 earnings report will be particularly important as an indicator of whether the company's transformation efforts are truly bearing fruit.

You can receive notifications when news is published.