Victoria's Secret & Co (VSCO) shares plummeted 5.10% in a 24-hour period, as investors reacted negatively to the company's lowered full-year guidance and weak second-quarter forecast, despite reporting in-line first-quarter results. The lingerie and beauty retailer's stock decline reflects growing concerns about its near-term performance and the impact of external factors on its business.

The company reported first-quarter adjusted earnings per share of 9 cents, matching analyst expectations, with quarterly sales remaining flat year-over-year at $1.35 billion. However, Victoria's Secret lowered its fiscal year 2025 adjusted operating income guidance to a range of $270 million to $320 million, down from its previous forecast of $300 million to $350 million. The company cited an estimated net tariff impact of approximately $50 million for the fiscal year as a contributing factor to the reduced outlook.

Adding to investor concerns, Victoria's Secret's second-quarter earnings forecast fell short of analyst expectations. The company projects adjusted earnings per share between 0 cents and 15 cents for Q2, compared to the consensus estimate of 30 cents. These downward revisions have prompted some analysts to adjust their price targets, with B of A Securities lowering its target from $20 to $18 while maintaining an Underperform rating. Conversely, Barclays maintained an Overweight rating and raised its price target from $22 to $23, suggesting a mixed sentiment among analysts. Despite the near-term challenges, UBS noted that Victoria's Secret remains a potential turnaround stock, as Q1 results showed signs that management's initiatives to reignite growth are bearing fruit.