Victoria's Secret parent L Brands jumps on revised guidance as latest stimulus boosts sales
Business Insider/Mary Hanbury
- Shares of L Brands, parent of lingerie retailer Victoria's Secret, rose by nearly 6% early Friday.
- The company raised its first-quarter earnings view to $0.85-$1 a share from $0.55 to $0.65 a share.
- An uptick in sales appears to be driven by stimulus payments and easing COVID-19 restrictions.
- See more stories on Insider's business page.
Shares of Victoria's Secret parent company L Brands climbed early Friday after lingerie retailer raised its quarterly earnings outlook, citing stimulus payments to Americans as a pillar of sales support.
L Brands now expects first-quarter earnings of $0.85-$1 per share, higher than its previous forecast of $0.55-$0.65 per share, excluding any charges related to the early extinguishment of debt. Analysts were looking for earnings of $0.62 per share, according to a survey of analysts at Yahoo Finance.
The shares tacked on 5.6% when they hit $62.77 before the opening bell. This year, the stock has jumped nearly 60% and has risen over the past 12 months from about $12.50.
"Improved sales trends," the company gauged, "are primarily driven by unusual shifts in consumer spending patterns, resulting from government stimulus payments, a relaxation of COVID-19 restrictions and other factors."
The US government this month began sending out $1,400 checks to most Americans to help them deal financially with the COVID-19 health crisis.
The company said it's seeing stronger activity at its Victoria's Secret chain as well as its Bath & Body Works stores.
"The environment remains uncertain, and there is no assurance that these improved trends will continue," L Brands said.
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