American Eagle Outfitters vs Victoria's Secret
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KIRA’s take AI analyst
I put American Eagle Outfitters and Victoria's Secret side by side, using each one’s latest annual report. Here is what stands out:
- Victoria's Secret is the larger business, with $6.6B of revenue in fiscal 2025 against $5.5B for American Eagle Outfitters.
- Victoria's Secret grew revenue faster (5.2%, against 4.1%).
- Victoria's Secret turned more of its sales into free cash flow (4.8% FCF margin, against 3.5%).
- Victoria's Secret earned a higher return on the capital invested in it (17.7%, against 11.5%).
- Investors pay more for each dollar of Victoria's Secret’s earnings: a P/E of 21.1x against 9.6x for American Eagle Outfitters.
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
American Eagle Outfitters
AEO
5/11
5-year growthGross marginNet marginNet debt / EBITDAShare count change
Victoria's Secret
VSXY
6/11
Revenue growthOperating marginFCF marginReturn on capitalReturn on equityPiotroski F-score
Side by side
Best in the row
| Latest fiscal year | AEO FY25 | VSXY FY25 |
|---|---|---|
| Size | ||
| Market cap | $3.2B | $8.0B |
| Revenue | $5.5B | $6.6B |
| Free cash flow | $195M | $312M |
| Net income | $192M | $161M |
| Growth | ||
| Revenue growth | 4.1% | 5.2% |
| 5-year growth | 8.1% | 3.9% |
| Share count change | −10.3% | 2.5% |
| Profitability | ||
| Gross margin | 36.5% | 36.4% |
| Operating margin | 4.1% | 4.1% |
| Net margin | 3.5% | 2.5% |
| FCF margin | 3.5% | 4.8% |
| Return on capital | 11.5% | 17.7% |
| Return on equity | 11.1% | 21.5% |
| Balance sheet | ||
| Net debt | −$197M | $457M |
| Net debt / EBITDA | −0.4x | 0.9x |
| Dividends and buybacks | $142M | $0.0M |
| Valuation & quality | ||
| P/E | 9.6x | 21.1x |
| Piotroski F-score | 4 | 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.