Victoria’s Secret Shares Jump as Retailer Unveils Stock Buyback Plan

Shares of Victoria’s Secret were on the rise on Wednesday after the company reaffirmed its forecast for Q4 and announces a plan to buy back $250 million of its stock.

The intimate apparel and clothing company said it had strong sales over the holidays and said sales will be in the range of flat to up 3% versus the year-ago period.

The lingerie retailer split from its parent company L Brands, and is attempting to stage a comeback. The company’s new campaign focuses on sexy models as well as adding more body-inclusive mannequins. Additionally Victoria’s Secret is also expanding into categories such as maternity.

Shares were up more than 11% in morning trading. On Tuesday, the shares closed at $48.58, giving it a market value of $4.29 billion.

The retailer is working with Goldman Sachs to repurchase $250 million of its own stock through an accelerated share repurchase program. The company said it anticipates the plan will be completed by the end of the first quarter of 2022. It will receive an initial 4.1 million shares of its stock on Dec. 31.

CEO Martin Waters said in a press release Wednesday that the company drew in customers and saw sales grow during peak shopping days over the holiday season, including Thanksgiving weekend, and had a “large rush of business” ahead of Christmas.

Looking ahead, Victoria’s Secret has reaffirmed its fiscal fourth-quarter forecast, which it shared in November. It said sales will be in the range of flat to up 3% versus last year’s fourth quarter and diluted earnings per share will be in the range of $2.35 to $2.65.

Waters said the share repurchase plan indicates the company’s confidence that it has “stabilized our business and created a platform for future growth.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.