Shares in the beauty owner jumped 6% following the announcement that has reinstated shareholders’ dividends
The owner of Victoria’s Secret, L Brands, has raised its first quarter earnings guidance as the booming business looks to perform strongly in 2021.
In a statement on Friday, the Columbus-based group’s CEO Andrew Meslow said that “due to strong sales and margin results” in 2020 the group expects its first quarter earnings to range between $0.55 to $0.65, up from its original guidance of $0.35 to $0.45 per share.
L Brands reported a 10% increase in comparable sales for Q4, ended 30 January 2021, while net sales topped almost $5bn, thanks to a 22% boost in sales of its Bath & Body Works business for the three months.
The rise also shows L Brands’ faith in Victoria’s Secret, which has proven to be a problem child for the company, struggling to turn over a profit even before the pandemic.
However, promising results in Q4 saw the beauty and lingerie brand post a 1% increase in sales for the full year.
As a result, following L Brands’ announcement, shares in the retail empire, founded by Les Wexner in 1963, jumped more than 6%.
The group has also agreed to reinstate its annual dividend at 60 cents per share, beginning with a quarterly pay-out in June this year.
“L Brands took a series of actions throughout 2020 to improve financial and operational performance, which led to record third and fourth quarter results, increased liquidity and a year-end cash balance of $3.9bn,” said Sarah Nash, L Brands’ Board Chair.
“The actions being announced today further support our effort to decrease leverage and enhance returns to shareholders, while better positioning the Bath & Body Works and Victoria's Secret businesses for separation in August.”