Victoria’s Secret stock soars 11% on profit beat

Victoria’s Secret shows lower sales in first earnings report after spin-off
Victorias Secret shows lower sales in first earnings report after

Shares of Victoria’s Secret & Co. jumped 11% in the extended session Wednesday after the apparel maker reported quarterly profit above estimates and said its “close partnerships” with suppliers are keeping supply-chain issues at bay. Victoria’s Secret
said it earned $75.2 million, or 81 cents a share, in the third quarter, compared with $143.4 million, or $1.62 a share, in the year-ago period and company guidance of earnings between 60 cents a share and 70 cents a share.

Sales rose 7% to $1.44 billion from a year ago, but declined 9% in comparison with the third quarter of 2019, reflecting a net closure of about 260 company-operated stores since that time. Analysts polled by FactSet expected Victoria’s Secret to report EPS of 70 cents a share on sales of $1.46 billion. “Our work to transform our brand, deepen our customer connections and improve our operational fundamentals is gaining positive traction,” Chief Executive Martin Waters said in a statement. The results came amid “challenging circumstances,” he said. The company continues to monitor supply-chain issues and believes “our close partnerships with our vendors and our work to get ahead of the curve will help mitigate those challenges,” Waters said. The company guided for fourth-quarter sales to be in a range between flat to up 3% compared with last year’s fourth quarter sales of $2.1 billion, and diluted EPS between $2.35 and $2.65. Victoria’s Secret shares began trading in early August, and are down nearly 30% in the past three months, versus a gain of around 5% for the S&P 500 index
in the same period. The separation from then-parent L Brands, long in the works, was completed in August.

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