Victoria’s Secret shares rose early Wednesday after the lingerie retailer announced share buybacks and said it had strong sales over the holidays.
Its stock was 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. Victoria’s Secret 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.
Victoria’s Secret is trying to stage a comeback, after years of declining sales and losing relevance with women. It split from its former parent company L Brands and has begun to overhaul its image, moving away from a heavy emphasis on sexy models, adding plus-size mannequins, and breaking into new categories like maternity and shapewear. It also ditched its iconic fashion show, which featured models in bedazzled bras, lacy underwear and angel wings after the event’s viewership plummeted.
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. He said the retailer has inventory ready for its semiannual sale.
The company 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.”
Correction: Martin Waters is CEO of Victoria’s Secret. An earlier version misstated his name.