1、 BofA Securities does and seeks to do business with issuers covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making the

2、ir investment decision.Refer to important disclosures on page 7 to 10.Analyst Certification on page 6.Valuation&Risk on page 6.12871599 Victorias Secret Still lookin pretty;maintain Overweight Earnings Review Maintain Overweight as brands remain solid We believe the PINK and Victorias Secret brands

3、are healthy and maintain our Overweight rating on the VSCOs 4.625%Sr Notes and Term Loan-B.Sales have improved over the last few months and we expect momentum builds through the holidays.We are particularly excited about the growth opportunity at PINK as the brands sales remain well below peak level

4、s.Attractive relative value We expect continued solid results cause bonds to trade higher.The 4.625s trade at$95 or a yield-to-worst of 6.1%,which is 40 bps wide of the BB Index.While upside in the Term Loan-B is limited given that it trades at$100.125,yields remain attractive(7.5%vs 6.6%for the BB

5、Loan Index).Adj EBITDA was well above our estimates 2Q25 Adj EBITDA decreased 6%to$118 million due to elevated operating costs,partially offset by(1)strong sales and(2)lower discounts.Adj EBITDA was significantly above our estimate of$88 million.Net sales increased 3%to$1.46 billion with a comparabl

6、e sales increase of 4%.The company ended the quarter with debt of$1.06 billion and cash of$188 million,leaving total leverage at 1.7x and net leverage at 1.4x.FY25 sales guidance increased Victorias Secret increased its FY25 sales guidance and affirmed its operating income guidance.FY25 guidance inc