Victoria's Secret shares jump on new CEO, strong second quarter

14th Aug 2024 12:30

(Sharecast News) - Shares in lingerie and fashion giant Victoria's Secret were rising early on Wednesday, after it announced the appointment of a new CEO, and reported preliminary quarterly results ahead of its previous forecasts.

The Ohio-based company said it had appointed Hillary Super as its new chief executive officer, effective from 9 September.

It said Super would bring almost 30 years of experience in retail and brand management, and would also join the company's board of directors.

She would succeed Martin Waters, who would serve as an advisor until 31 August to help ensure a smooth transition.

Timothy 'TJ' Johnson, the company's chief financial and administrative officer, would act as interim CEO until Super took over.

Super most recently served as CEO of Savage X Fenty, an intimates and accessories brand chaired by Rihanna, and previously held the role of global CEO at Anthropologie Group.

"VS&Co welcomes Hillary as our new CEO to power the business' next chapter and deliver the foremost tenet of our transformation strategy - accelerating growth in our core business in North America," said board chair Donna James.

"We are particularly impressed with her merchant leadership capabilities paired with an operator's discipline and bias for driving value creation.

"She understands vertically integrated retail brands and has an intuitive understanding of the consumer landscape, informed by customer insights which are critical for consistently delivering in this industry and its ever-accelerating fashion and economic cycles."

In conjunction with the leadership change, Victoria's Secret provided preliminary financial results for the second quarter ended 3 August.

The company reported that net sales, adjusted operating income, and adjusted diluted earnings per share were set to meet or exceed the upper end of its previous guidance.

Specifically, net sales were projected to decrease by 1% to 2%, slightly better than the prior guidance of a 1% to 3% decline.

Adjusted operating income was expected to be between $57m and $62m, significantly higher than the prior guidance range of $30m to $45m.

Its adjusted diluted earnings per share were forecast to be between 34 cents and 39 cents, well above the prior guidance of 5 cents to 20 cents.

"We are pleased to share our preliminary results for the second quarter, which we expect to meet or exceed our previously communicated guidance and current street estimates," said CFO TJ Johnson.

"We were encouraged by the continued sequential improvement in quarterly sales results in North America for the fourth consecutive quarter, as sales trends improved in both our stores and digital channels.

"Throughout the quarter, our merchant teams delivered newness of product with particular success in the launch of our Victoria's Secret Dream bra collection, and in apparel with our PINK Friday back to campus event in late July."

Johnson said iImproving product acceptance and disciplined inventory management led to strong margin performance, adding that the company's teams were "relentlessly" focussing on improving its cost structure, driving year-on-year quarterly operating income growth for the first time since 2021.

"We look forward to sharing more details on our second quarter results and our expectations for the balance of 2024 on our upcoming earnings call on 29 August."

At 0800 EDT (1300 BST), shares in Victoria's Secret & Co were up 14.87% in premarket trading in New York, at $21.91.

Reporting by Josh White for Sharecast.com.