Victoria's Secret & Co. reports today carrying a short position that has ballooned 32% in a single month — a striking build ahead of a quarter where the last print sent the stock down more than 22%.
Short sellers have added aggressively. Short interest climbed from roughly 10 million shares at the end of April to 13 million by June 1, pushing it to 16.2% of free float. Days to cover run at 6.4. The borrow itself is not the constraint — availability is generous at 470%, meaning there are nearly five shares available for every one already borrowed, and cost to borrow is just 0.42%. The lending market is wide open, which tells you shorts are building by choice, not being squeezed in. Options positioning, by contrast, has turned notably more bullish over recent weeks: the put/call ratio fell to 0.58, well below its 20-day average of 0.60, after running in the 0.77–0.83 range through late April and early May. Shares are up about 4% on the month and 3.5% on the week to close at $54.30 — a modest recovery that has not deterred bears from pressing.
The bull and bear cases are sharply defined. Bulls point to a strong beat last quarter, raised guidance, beauty as a high-growth category, and a credible bra-authority repositioning strategy. Forward earnings momentum is particularly strong — the factor scores rank 12-month forward EPS growth in the 97th percentile, and analyst recommendation divergence sits in the 93rd percentile, suggesting a meaningful gap between where consensus rates the stock and where the underlying trend is heading. Wells Fargo upgraded to Overweight in early May and Bank of America moved to Buy in late April, both lifting targets — a pair of meaningful upgrades from sizeable firms within the past five weeks. The mean analyst target is $74, against a current price of $54, implying roughly 36% upside. Bears focus on tariff exposure and lingering bra-sales weakness. The March print delivered the bear case in full: a 22% one-day drop and a 25% five-day loss after the company missed, a reaction that clearly seeded the current short build.
The ownership picture adds texture. FMR (Fidelity) added nearly 2.7 million shares in its most recent filing, a substantial addition that stands out among the top holders. Greenlight Capital added over 500,000 shares in Q1. Those are active, conviction-style buyers building alongside the short sellers — a genuine two-sided setup. The independent chairman also made a modest open-market purchase in early April at $46.23, a price the stock has since cleared by 17%.
Today's earnings release is therefore less a referendum on whether the brand has stabilised and more a test of whether management can demonstrate that the Q1 recovery — and the raised guidance tied to it — is durable enough to justify a stock that has re-rated nearly 30% off its April lows, with 16% of the float still betting against it.
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