Gap vs Victoria's Secret
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KIRA’s take AI analyst
I put Gap and Victoria's Secret side by side, using each one’s latest annual report. Here is what stands out:
- Gap is the larger business, with $15.4B of revenue in fiscal 2025 against $6.6B for Victoria's Secret, about 2.3 times as much.
- Victoria's Secret grew revenue faster (5.2%, against 1.9%).
- Gap kept more of each dollar of sales as operating profit (7.3% operating margin, against 4.1%).
- Gap turned more of its sales into free cash flow (5.4% FCF margin, against 4.8%).
- Gap earned a higher return on the capital invested in it (36.1%, against 17.7%).
- Investors pay more for each dollar of Victoria's Secret’s earnings: a P/E of 21.1x against 6.7x for Gap.
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
Gap
GAP
8/11
Gross marginOperating marginNet marginFCF marginReturn on capitalReturn on equityNet debt / EBITDAShare count change
Victoria's Secret
VSXY
2/11
Revenue growth5-year growth
Side by side
Best in the row
| Latest fiscal year | GAP FY25 | VSXY FY25 |
|---|---|---|
| Size | ||
| Market cap | $8.1B | $8.0B |
| Revenue | $15.4B | $6.6B |
| Free cash flow | $823M | $312M |
| Net income | $816M | $161M |
| Growth | ||
| Revenue growth | 1.9% | 5.2% |
| 5-year growth | 2.2% | 3.9% |
| Share count change | 0.0% | 2.5% |
| Profitability | ||
| Gross margin | 40.8% | 36.4% |
| Operating margin | 7.3% | 4.1% |
| Net margin | 5.3% | 2.5% |
| FCF margin | 5.4% | 4.8% |
| Return on capital | 36.1% | 17.7% |
| Return on equity | 23.1% | 21.5% |
| Balance sheet | ||
| Net debt | −$1.5B | $457M |
| Net debt / EBITDA | −0.9x | 0.9x |
| Dividends and buybacks | $402M | $0.0M |
| Valuation & quality | ||
| P/E | 6.7x | 21.1x |
| Piotroski F-score | 6 | 6 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.