Victoria’s Secret (VSCO) Stock: Why The Price Jumped Today

By Amit Chowdhry ● Nov 18, 2021
  • The stock price of Victoria’s Secret & Co. (NYSE: VSCO) increased by over 14% pre-market today. This is why it happened.

The stock price of Victoria’s Secret & Co. (NYSE: VSCO) increased by over 14% pre-market today. Investors are responding positively to the company’s third-quarter earnings.

These are the highlights:

— The company reported a net income of $75.2 million, or diluted earnings per share of $0.81 in the third quarter of 2021, compared to previously communicated guidance of $0.60 to $0.70 per diluted share. And the results compare to net income of $143.4 million, or earnings per share of $1.62, and adjusted net income of $72.6 million, or adjusted earnings per share of $0.82 for the period ended October 31, 2020.

— The third quarter 2021 operating income was $107.9 million compared to operating income of $127.4 million and adjusted operating income of $97.5 million in last year’s third quarter. The third quarter 2021 operating income growth of 11% over adjusted operating income in last year’s third quarter was driven by solid total sales growth of 7% and gross margin dollar growth of 14%.

— The company reported net sales of $1.441 billion for the third quarter of 2021, an increase of 7% compared to net sales of $1.353 billion for last year’s third quarter. And the third quarter of 2021 sales decreased 9% compared to sales of $1.577 billion in the third quarter of 2019 and reflect the net closure of approximately 260 company-operated stores since the third quarter of 2019. Total comparable sales for the third quarter of 2021 increased 4% compared to the third quarter of 2019.

Q4 2021 Outlook

— The company is forecasting fourth-quarter 2021 sales to be in the range of flat to up 3% versus last year’s fourth-quarter sales of $2.1 billion and diluted earnings per share to be in the range of $2.35 to $2.65.

KEY QUOTE:

“I am very pleased with our solid third quarter performance which reflects growth in all core categories. Our work to transform our brand, deepen our customer connections and improve our operational fundamentals is gaining positive traction. We continue to improve our merchandise assortment and expand our already strong customer file. I’m proud of the commitment and resilience demonstrated by our teams, who delivered these results in challenging circumstances, and in doing so are demonstrating the power of a healthy culture. We continue to monitor global supply chain issues and believe our close partnerships with our vendors and our work to get ahead of the curve will help mitigate those challenges. Looking ahead, the leadership team and I believe we have the right strategy and a dedicated team focused on driving long-term growth and creating value for our shareholders.”

— CEO Martin Waters

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.