Pedestrians stroll previous a Victoria’s Secret retailer, a subsidiary of L Brands, in New York.
Craig Warga | Bloomberg | Getty Images
L Brands shares shot up almost 7% in premarket buying and selling Friday after the corporate hiked its revenue outlook for the present quarter, and stated it could be reinstating an annual dividend, paying down debt and shopping for again shares.
L Brands stated in a press launch that it plans to repay $1.03 billion of debt utilizing $1.1 billion of money available. The firm additionally introduced a contemporary $500 million share buyback plan to switch its present program, which has $79 million remaining on it.
The firm, which owns the Victoria’s Secret lingerie model in addition to Bath & Body Works, additionally stated it can reinstate its annual dividend of 60 cents per share, starting with a quarterly dividend paid in June.
Building on the momentum it noticed over the vacations, L Brands now forecasts first-quarter earnings per share to fall inside a spread of 55 cents to 65 cents, up from a previous vary of 35 cents to 45 cents.
CEO Andrew Meslow stated in an announcement that, whereas the present retail setting stays unsure through the Covid pandemic, the corporate was capable of increase its outlook because of the sturdy gross sales and earnings it has seen quarter up to now.
L Brands continues to be forging forward with its plans to separate Victoria’s Secret from Bath & Body Works, which it expects to finish by August. The firm has stated that may both be by a derivative or a sale to a different entity. Last yr, L Brands had struck a deal to promote Victoria’s Secret to personal fairness agency Sycamore Partners. But the $525 million settlement fell aside, because the well being disaster quickly shut the corporate’s shops.
L Brands shares are up greater than 180% over the previous 12 months. The firm has a market cap of $15.53 billion.