By Dhirendra Tripathi
Investing.com – L Brands (NYSE:LB) stock rose 2% a day after the retailer gave an improved outlook for the second quarter.
L Brands is the owner of brands like Victoria’s Secret and Bath & Body Works.
The company cited strong customer response to merchandise assortments and disciplined inventory management that enabled a reduction in promotional activity as reasons for raising its guidance.
The company now expects to report second quarter earnings per share between $1.20 and $1.30, compared to its previous guidance of 80 cents to $1.00.
The company expects to report second quarter operating income of more than $400 million for the Bath & Body Works segment, and more than $200 million for the Victoria’s Secret segment.
L Brands reported net sales of $2.35 billion for the nine weeks ended July 3. They were higher by 72% and 12% percent compared to same period in 2020 and 2019 respectively.
The company also announced a $500 million share buyback plan, replacing the previous program of the same size. Of that amount, $36.2 million remained.
In a separate announcement, L Brands said founder Leslie H. Wexner and affiliated stockholders will sell 20.04 million shares of the company with no proceed flowing to it.
L Brands has agreed to repurchase 10 million shares from one of the selling stockholders. The price L Brands will pay for each share will be equal to the public offering price in the offering, less the underwriting discount. The repurchase is part of the $1.5 billion share repurchase program announced today.
The company is currently undergoing a reorganization which will see it operate as two listed entities from next month.
The new company, named Victoria’s Secret & Co, will include Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty. L Brands will be known as Bath & Body Works and will be traded on the exchanges under a new symbol, BBWI, starting August 3.