The retail and tech sectors delivered a surprising jolt to Wall Street yesterday as Victoria’s Secret, Ulta Beauty, and Hewlett Packard Enterprise all saw their stocks surge following better-than-expected financial results and improved outlooks. The market reaction highlights investor sensitivity to forward guidance during a period of economic uncertainty.
Victoria’s Secret shares jumped nearly 14% after the lingerie retailer reported fourth-quarter profit that exceeded analyst expectations. The company earned $1.38 per share, comfortably beating the $1.29 consensus estimate, according to data from FactSet. While sales declined 3.1% to $2.08 billion, the figure still surpassed Wall Street’s projections, suggesting the company’s turnaround efforts are gaining traction.
“We’re seeing tangible evidence that Victoria’s Secret’s brand revitalization strategy is resonating with consumers,” said Dana Telsey, CEO at Telsey Advisory Group. “Their focus on inclusive sizing and evolving marketing approach appears to be stabilizing their market position after years of struggle.”
The retailer’s guidance proved particularly encouraging to investors. Management projected first-quarter earnings between $0.40 and $0.60 per share, reflecting confidence in operational improvements despite ongoing challenges in the consumer spending environment. This outlook comes after several difficult years for the brand, which has worked to distance itself from its formerly provocative image toward more inclusive marketing.
Beauty retailer Ulta similarly impressed investors, with shares climbing over 11% following solid earnings and an unexpected boost to its 2025 outlook. The company reported earnings of $8.08 per share on revenue of $3.55 billion, exceeding analyst expectations of $7.51 per share on $3.51 billion in revenue.
Mary Dillon, Ulta Beauty’s CEO, pointed to resilient consumer spending in the premium beauty segment. “Even in a challenging macro environment, we’re seeing customers prioritize self-care and indulgence in the beauty category. Our omnichannel approach continues to drive engagement across both physical and digital touchpoints,” Dillon noted during the earnings call.
Ulta raised its fiscal 2025 earnings guidance to a range of $26.20 to $27.00 per share, up from previous projections of $25.20 to $26.00. The company also increased its comparable sales growth forecast to 4% to 5%, compared to its prior outlook of 3% to 4%. This optimism stands in contrast to broader retail concerns about consumer spending pullback.
In the technology sector, Hewlett Packard Enterprise delivered its own positive surprise, with shares initially dipping after hours but reversing course to trade up more than 9%. The enterprise technology company reported adjusted earnings of $0.48 per share, exceeding consensus estimates of $0.43, while revenue of $7.35 billion narrowly beat expectations of $7.33 billion.
HPE’s guidance proved to be the catalyst for the stock’s surge. The company projected second-quarter adjusted earnings between $0.43 and $0.50 per share, with the midpoint above analyst expectations of $0.45. For the full fiscal year 2025, HPE maintained its adjusted earnings outlook of $1.82 to $2.02 per share.
Antonio Neri, HPE’s President and CEO, emphasized the company’s transformation toward higher-margin recurring revenue streams. “Our as-a-service strategy continues to gain momentum, with annualized revenue run rate growing 41% year-over-year,” Neri said. “This shift not only improves our revenue predictability but also enhances our long-term profitability profile.”
The simultaneous rallies in these diverse companies reflect a market increasingly focused on forward-looking indicators rather than past performance. With the Federal Reserve expected to begin cutting interest rates later this year, investors appear particularly responsive to companies expressing confidence about future prospects.
“What we’re seeing is a bifurcation in consumer spending patterns,” explained Brian Nagel, senior analyst at Oppenheimer. “Essential goods are facing pressure, but categories that deliver emotional benefits – whether it’s beauty products or technology that enables productivity – continue to show resilience.”
The stock surges also demonstrate the premium markets are placing on companies successfully navigating transformation efforts. Victoria’s Secret continues reinventing its brand identity, Ulta is capitalizing on beauty’s resilience during economic downturns, and HPE is pivoting toward recurring revenue models.
Trading volume across all three stocks was significantly elevated, with Victoria’s Secret seeing nearly five times its average daily volume. Institutional investors appeared to be behind much of the buying activity, according to data from S&P Global Market Intelligence.
These positive moves come against a backdrop of mixed retail performance overall. Recent Commerce Department data showed January retail sales declining 0.8%, significantly worse than economist predictions of a 0.2% drop, raising concerns about broader consumer spending trends heading into 2025.
As earnings season winds down, investor attention will likely turn to upcoming economic indicators and Federal Reserve policy decisions. However, yesterday’s strong market reaction suggests that companies demonstrating adaptability and offering optimistic outlooks will continue to attract investment capital, even in uncertain economic conditions.
