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Victoria’s Secret Plans to Buy Back $250M in Stock; Reaffirms Guidance – WWD

Victoria’s Secret’s latest comeback strategy includes $250 million in common stock.

The underwear and beauty, beauty The retailer disclosed Wednesday that it has entered into a rapid stock repurchase agreement with Goldman Sachs to buy back $250 million of common stock. As a result, shares of Victoria’s Secret & Co. was up nearly 12% in early trading on Wednesday.

Victoria's Secret

The year 2021 of Victoria’s Secret holiday campaign.
Photo courtesy Zoey Grossman

“Over the past few months, we have stabilized our business and laid the foundation for future growth while generating significant cash flows.w,” Martin Waters, chief executive officer by Victoria’s Secret Underwear, said in a statement. “OFinancial stability and cash flow potential are the pillars of strength and competitive advantage. With the unanimous backing of our management, we will announce our first share buyback. We believe this share repurchase reflects our faith in the company and is another step on our journey to creating sustainable, long-term value for our shareholders.”

Under the terms of the agreement, the company will make an initial payment of $250 million for Goldman Sachs. [accelerated share repurchase agreement] less discounts,” the company said. The deal is expected to close in the first quarter of 2022.

Victoria's Secret Hailey Bieber

Hailey Bieber for Victoria’s Secret.
Courteous photo

Also on Wednesday, the retailer reaffirmed its previous fourth-quarter guidance, which predicted flat revenue, up 3 percent, from last year’s fourth-quarter revenue of $2.1 billion. USD. Additionally, Victoria’s Secret expects operating income to be between $295 million and $335 million, and is impaired. income-year sharing is from $2.35 to $2.65 per person.

“I am very pleased with our fourth quarter performance so far and believe we have solid plans in place to balance holiday best-selling season,” Waters said. “I am particularly encouraged by our sales growth during the peak shopping days over Thanksgiving weekend and the big business boost as we approach December 25th. Stores Our stock was in good condition as we started selling every six months and celebrated the positive stimulus affecting sales last January. Performance has been widely adopted across all of our businesses and our store channel is a strong point for our results. The teams have done well and are focused on what we can control in this challenging supply chain environment, and I couldn’t be more proud of my efforts.”

The company generated $1.4 billion in total revenue in the most recent quarter, helped the company record $75 million in net profit and boost its full revenue guidance for fiscal 2021 by 25%, compared with full-year 2020 sales results, which ranged from $6.7 billion to $6 billion. ,8 billion dollars, dedespite the expectation $100 million additional supportstring of cups cost.

Victoria's Secret

Highlights from Victoria’s Secret’s 2021 holiday campaign.
Courteous photo

“This is a clear positive about one of the cheapest names being covered,” said Ike Boruchow, senior retail analyst at Wells Fargo, wrote in a note. “The company’s release of encouraging trends in business (especially in stores) during the key holiday periods really shows their confidence heading into 2022 in terms of stimulus comparisons. beginning in January), as well as in navigating supply chain disruptions. VSCO has shown us that brand dynamics are still growing, and increasingly shareholder-friendly actions are another reason to stay positive. We don’t see anything today that changes our bullish stance on the company at current levels.”

His company rates Victoria’s Secret stock as “overweight” and sets a price target of $85.

Victoria's Secret

Victoria’s Secret’s 2021 holiday campaign.
Courteous photo

Victoria’s Secret also launches the first VS Store of the future in Chicago in November, the first of three will open in the coming months. (The other two locations will be in Houston and Birmingham, Ala.) The updated space includes a selection of sexist products, a beauty, beauty bar, open plan, soft lighting, enhanced dressing room Technology and lots of mirrors so shoppers can see themselves in the product while in the store.

Besides inner clothes and the beauty company continues to update the categories, increase size range and add new members to VS Collective – an initiative comprised of women from diverse backgrounds who share their stories by way of partnerships and cooperation. Last month Victoria’s Secret told WWD dedicated to that tennis star Naomi Osaka joined VS Collective.

“Our job is to make the best of what we have and that’s what we do every day,” Waters said at the time..

Shares of Victoria’s Secret & Co. down about 9.1%, year-to-date The company launched on August 3 in the mass market.

https://wwd.com/fashion-news/intimates/victorias-secret-repurchase-250-million-in-stock-1235023813/ Victoria’s Secret Plans to Buy Back $250M in Stock; Reaffirms Guidance – WWD

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