Victoria’s Secret parent L Brands raises forecast, says CFO is retiring
People walk past a Victoria’s Secret store in Barcelona.
John Milner | LightRocket | Getty Images
Victoria’s secret parent company L Brands shares rebounded Thursday after raising their quarterly outlook. They said they had strong sales in January and reiterated their plans to separate their businesses.
It also announced long-time CFO Stuart Burgdoerfer’s plans to retire in August. A search for his replacement is ongoing.
Burgdoerfer was the interim CEO of Victoria’s Secret. He is immediately replaced in this role by Martin Waters, who is currently CEO of Victoria’s Secret Lingerie.
The company raised its earnings guidance for the fourth quarter from $ 2.70 to $ 2.80 per share to $ 2.95 to $ 3.00 per share. Sales in the same store are expected to increase 10% in the quarter, which includes a 22% increase at Bath & Body Works and a 3% decrease at Victoria’s Secret.
The stock closed at $ 48.07 on Thursday, up more than 9%. They hit a 52-week high of $ 49.12 earlier in the day. At the close of trading on Thursday, they were up about 102% last year, bringing the company’s market value to $ 13.37 billion.
L Brands plans to separate its two brands, Victoria’s Secret and the faster growing Bath & Body Works, by August.
In a press release, the company said its board of directors had received updates from its financial advisors Goldman Sachs and JPMorgan at a meeting in January and was considering a public company demerger or sale of the business.
L Brands closed a deal to sell Victoria’s Secret last year, but it fell apart. Private equity firm Sycamore Partners agreed to acquire a majority stake in Victoria’s Secret for $ 525 million. This would have privatized the brand. However, it was scrapped in May when the pandemic temporarily closed stores and added to Victoria’s Secret challenges.
The company has gone through a reorganization to stabilize its flagship brand. During the pandemic, the company benefited from strong sales from its other retail chain, Bath & Body Works, as Americans stock up on soap and hand sanitizer.
A stronger than expected Christmas season was reported last month. In the nine weeks ending January 2, sales in the same store rose 5% as shoppers bought pajama pants and candles. Sales in the same store decreased 3% in the comparable nine weeks of the previous year.
The company will announce its fourth quarter results on February 24th.