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Investing.com – Victoria’s Secret stock (NYSE:VSCO) soared 9% in Wednesday’s premarket after the company revealed an accelerated share repurchase plan while also reiterating its fourth-quarter sales, operating income and earnings guidance.
The company said its first-ever share repurchase covers around 4.1 million shares worth $250 million, to be bought Friday from Goldman Sachs. The final settlement of the volume it will buy and the price to be paid is expected to be completed in the first quarter of 2022, the retailer said.
At the company’s current base of 88.59 million shares, the buyback comprises 4.6% of its equity. A buyback boosts share prices as it means future profits will be distributed among those many fewer shares.
The company on Nov. 17 said its sales would be between $2.1 billion and $2.16 billion, operating income would be $315 million at the center of its guidance range and diluted EPS would be $2.50 at the midpoint of the guidance range.
For the third quarter ended October 30, the company reported adjusted profit per share of 81 cents compared with 82 cents in the same quarter a year ago. Net sales rose 7%, to $1.44 billion.
The intimates specialty and beauty products retailer was spun off from L Brands (NYSE:BBWI) earlier this year. The parent’s retail business of bath, body and home fragrance is now housed under Bath Body WorksI.
