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Following the announcement about the buyback program, Victoria’s Secret stock soared to close 12.19% up at $54.50 on Wednesday.
Early Wednesday, stock of American lingerie, clothing, and beauty retailer Victoria’s Secret & Co. (NYSE: VSCO) soared. It happened after Victoria’s Secret announced a $250 million share buyback program. According to the company, it will repurchase $250 million of 4.1 million common shares from Goldman Sachs Group Inc (NYSE: GS) on December 31, 2021. The company’s program on the first-ever repurchase will be closed by the end of the first quarter of 2022.
Following the announcement about the buyback program, Victoria’s Secret stock soared to close 12.19% up at $54.50 on Wednesday. In the after-hours trading, Victoria’s Secret shares added another 0.37% to $54.70. The retailer’s market cap has totaled $4.828 billion. Notably, yesterday’s surge allowed VSCO shares to break above several moving averages, including the 60-day trendline that has been at a $52 level.
Victoria’s Secret Strong Sales
Victoria’s Secret buyback program is not the only reason the company’s shares rocketed. In addition to the announcement, the retailer reaffirmed its fourth quarter sales, operating income and earnings guidance. According to Victoria’s Secret, its sales will be up 3% in contrast to Q4 2020 due to the holiday season. Besides, its diluted earnings per share will be in the range of $2.35 to $2.65. The operating income is expected to be in the range of $295 million to $335 million.
Victoria’s Secret CEO Martin Waters commented:
“I am very pleased with our fourth quarter performance to date and believe we have solid plans in place for the balance of this holiday selling season. I was particularly encouraged by our sales growth during the peak shopping days over the Thanksgiving weekend and the large rush of business as we approached December 25th.”
“Our stores are in a good inventory position as we begin our semi-annual sale and anniversary the positive stimulus impact on sales in January of last year. Performance has been broad-based across all of our businesses, and our stores channel has been a position of strength for our results. The teams have executed well and focused on what we can control in this challenging supply chain environment, and I could not be more proud of our efforts.”
Victoria’s Secret benefited from the holiday season. It performed well on Thanksgiving weekend as well as Christmas. Its CEO Martin Waters believes the company can do even better with New Year coming. In addition, Waters stated that financial stability and cash flow potential are pillars of strength and competitive advantages. With the share repurchase, Victoria’s Secret will inspire its shareholders, creating long-term and sustainable value for them.