U.S.-based intimates retailer Victoria?s Secret&Co.'s (VS) reported better-than-expected operating performance while paying down borrowings fully under its asset-based lending (ABL) facility during the fourth quarter of 2024, leading to improved credit metrics. We project VS will continue to generate positive free operating cash flow (FOCF) and maintain steady profitability metrics, including S&P Global Ratings-adjusted margins in the mid- to high-16% range for fiscal 2025 despite tariff related pressures. Therefore, we revised our outlook on VS to stable from negative and affirmed all our ratings, including the 'BB-' issuer credit rating. The stable outlook reflects our expectation for improving operating performance and a financial policy that results in S&P Global Ratings-adjusted leverage sustained in the mid-2x area over the
