Pedestrians pass a store in Victoria’s Secret, a subsidiary of L Brands, in New York.
Craig Warga | Bloomberg | Getty Images
Shares of L Brands rose nearly 7% in trading before trading Friday after the company raised its earnings forecasts for the current quarter and said it would restore an annual dividend, repay debt and buy shares again.
L Brands said in the press release that it plans to repay $ 1.03 million in debt with $ 1.1 billion in cash. The company also announced a new $ 500 million share repurchase plan to replace its existing program, which has $ 79 million left.
L Brands, owner of lingerie brand Victoria’s Secret and Bath & Body Works, also said it will reinstate its annual 60-cent dividend per share, starting with a quarterly dividend paid in June.
Based on the momentum it saw over the holidays, L Brands predicts earnings per share for the first quarter to fall in a range of 55 cents to 65 cents, up from a previous range of 35 cents to 45 cents.
CEO Andrew Meslow said in a statement that while the current business environment remains uncertain during the Covid pandemic, the company was able to raise its outlook due to the strong sales and profits it has seen. quarterly.
L Brands continues to advance plans to separate Victoria’s Secret from Bath & Body Works, which it hopes to complete in August. The company has said it will be through a referral or sale to another entity. Last year, L Brands had reached an agreement to sell Victoria’s Secret to private equity firm Sycamore Partners. But the $ 525 million deal collapsed as the health crisis temporarily closed the company’s stores.
Shares of L Brands have risen more than 180% in the last twelve months. The company has a market cap of $ 15.53 million.
Find the full L Brands press release here.