What Happened?
A number of stocks fell in the afternoon session after reports pointed to a broad-based weakening of consumer health, highlighted by rising loan delinquencies and falling spending intentions.
This downturn was fueled by multiple reports signaling a deteriorating financial situation for consumers. Data revealed that even upper-income Americans are increasingly falling behind on credit card and auto loan payments, suggesting big-ticket spending is fading. Further dampening sentiment, the latest Consumer Confidence report, despite a headline increase, showed that consumers are being more cautious. The auto sector also flashed warning signs, with projections for July showing flat sales compared to last year, weighed down by high prices and interest rates.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Apparel Retailer company Torrid (NYSE: CURV) fell 4%. Is now the time to buy Torrid? Access our full analysis report here, it’s free.
- Home Furniture Retailer company RH (NYSE: RH) fell 3.3%. Is now the time to buy RH? Access our full analysis report here, it’s free.
- Apparel Retailer company Victoria's Secret (NYSE: VSCO) fell 4.3%. Is now the time to buy Victoria's Secret? Access our full analysis report here, it’s free.
- Vehicle Retailer company America's Car-Mart (NASDAQ: CRMT) fell 3.3%. Is now the time to buy America's Car-Mart? Access our full analysis report here, it’s free.
- Boat & Marine Retailer company OneWater (NASDAQ: ONEW) fell 3.2%. Is now the time to buy OneWater? Access our full analysis report here, it’s free.
Zooming In On Victoria's Secret (VSCO)
Victoria's Secret’s shares are extremely volatile and have had 43 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 3.3% on the news that the company announced a significant product innovation within its top-selling collection.
Victoria's Secret introduced the new "FlexFactor Lightly Lined Plunge Demi Bra" to its flagship "Body by Victoria" line. The company highlighted the new bra's technology, which included a flexible titanium underwire and memory foam designed to enhance comfort and support. This launch was significant as the "Body by Victoria" collection represented a major part of the brand's business, with the company noting one bra from the collection was sold every five seconds.
Victoria's Secret is down 50.8% since the beginning of the year, and at $19.89 per share, it is trading 59.2% below its 52-week high of $48.71 from December 2024. Investors who bought $1,000 worth of Victoria's Secret’s shares at the IPO in July 2021 would now be looking at an investment worth $468.24.
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