Lingerie and apparel retailer Victoria’s Secret & Co. is strengthening its AI and digital transformation initiatives as it enters a new growth phase fueled by product innovation, social commerce, and stronger digital engagement.
During its Q4-2025 earnings call, the retail company reported its strongest holiday performance since becoming an independent public company, highlighting how technology-driven retail strategies are reshaping customer experience and operational efficiency.
AI adoption enhances retail operations and personalization
Victoria’s Secret is increasingly integrating artificial intelligence into core business processes to improve efficiency and customer engagement.
Murali Sundararajan is the Chief Information Officer (CIO) at Victoria’s Secret. He has been instrumental in implementing Google Cloud AI to enhance digital and in-store, personalized shopping experiences.
CEO Hillary Super said Victoria’s Secret is making investment in AI to optimize inventory cycles, helping ensure that popular products are stocked efficiently while minimizing overproduction and markdowns. The retailer is also applying AI tools to deliver more personalized customer interactions across digital channels.
The company is committed to deploying artificial intelligence in a responsible and ethical manner while strengthening its technology infrastructure.
Social commerce and live streaming drive digital engagement
Digital innovation is playing a major role in Victoria’s Secret’s global expansion, particularly in Asia.
The company highlighted the growing importance of live streaming and social commerce, especially in markets such as China, where interactive digital shopping experiences are becoming a powerful driver of customer engagement and online conversions.
Through live streaming events and real-time product showcases, the brand is connecting directly with consumers and accelerating digital sales growth in international markets.
Data-driven product innovation and personalized fit
Victoria’s Secret is also using customer data and feedback to refine product design and improve fit personalization.
The company has re-engineered its flagship Very Sexy collection to include a wider range of lift levels and fit options, allowing the brand to serve a broader range of body types.
These data-driven product improvements are part of a broader effort to modernize the company’s heritage collections while strengthening customer loyalty.
Digital strategy fuels global sales growth
Digital expansion is a central pillar of Victoria’s Secret’s transformation strategy.
Comparable sales increased 8 percent in Q4 2025, with the digital channel significantly outperforming physical retail. International sales rose 43 percent year-over-year to $276 million, driven largely by the growth of digital commerce and social shopping platforms.
The company is also reshaping its marketing approach by redefining the brand’s image around confidence and authenticity. This repositioning has helped restore momentum in the core bra business, which returned to growth for the first time in four years.
Meanwhile, the PINK brand recorded its strongest growth in a decade by targeting younger consumers and expanding digital engagement strategies.
Strong financial performance during the holiday season
Victoria’s Secret delivered strong financial results during the fourth quarter.
Net sales reached $2.27 billion, exceeding company guidance and marking the highest fourth-quarter revenue since the company separated from L Brands.
Adjusted earnings per share were $2.77, significantly above the forecast range of $2.20 to $2.45.
For the full year, adjusted EPS reached $3.00, representing a 22 percent increase compared with the previous year and marking the first annual growth since the company became independent.
Customer growth and improved retail execution
The company also reported steady growth in its customer base, supported by both new customer acquisition and improved retention among existing shoppers.
Another contributor to improved margins was the reduction in promotional activity. Victoria’s Secret achieved strong holiday sales with fewer discounting periods, signaling progress toward a more profitable retail model.
Product categories such as sleepwear and beauty were among the strongest performers during the holiday season.
Managing tariff risks and strengthening cybersecurity
Looking ahead, Victoria’s Secret expects to face approximately $160 million in incremental tariff costs in 2026 due to global trade conditions.
The company anticipates a 175 basis point impact on first-quarter gross margins but plans to offset much of this pressure through sourcing adjustments and cost optimization initiatives.
As digital commerce expands, the retailer is also strengthening its technology infrastructure to protect customer data and ensure resilience against potential cybersecurity threats.
Growth outlook for 2026
Victoria’s Secret expects continued momentum in the coming year, projecting net sales between $6.85 billion and $6.95 billion in 2026, representing growth of approximately 5 percent to 6 percent. With AI-powered retail operations, expanding digital commerce capabilities, and a revitalized brand strategy, Victoria’s Secret is positioning itself to capture new growth opportunities in the evolving global fashion and e-commerce landscape.
RAJANI BABURAJAN
