Victoria's Secret & Co (VSCO) shares plummeted 10.27% during intraday trading on Thursday, as the market reacted negatively to the company's latest earnings report and strategic announcements.

Despite reporting fourth-quarter adjusted earnings of $2.77 per share, beating analyst estimates of $2.52, and revenue of $2.27 billion that exceeded expectations of $2.23 billion, investors focused on several concerning developments. The company initiated a strategic review of DailyLook, a non-core clothing brand acquired through the Adore Me transaction, and stated it continues to assess the Adore Me business itself, creating uncertainty about these assets.

The earnings report also revealed significant business headwinds, including approximately $85 million in tariff pressure during fiscal year 2025 and a $20 million negative impact to direct net sales from a website closure related to a security incident. Furthermore, the company's guidance for first-quarter fiscal 2026 operating income of $32 million to $42 million showed limited growth compared to the prior year. Analysts noted that despite the upbeat quarter and strong annual sales view, expectations had run up significantly with the stock rising nearly 11% year-to-date before the report, explaining the market's negative reaction.