(Bloomberg) — Victoria’s Secret & Co. shares soared after the company beat earnings estimates and boosted its outlook, adding to signs of progress for Chief Executive Officer Hillary Super’s turnaround plan.
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The lingerie retailer raised its annual net sales guidance to as much as $7.13 billion, up from a previous high of $6.95 billion. Victoria’s Secret reported net sales of $1.56 billion for the quarter ended May 2, exceeding analysts estimates. Comparable sales for the quarter were also above forecasts.
The stock surged as much as 48% to a record high shortly after the start of regular trading Tuesday. Roughly 19% of the company’s tradeable shares are shorted, according to data from S3 Partners, a relatively high level that tends to render securities more volatile.
Victoria’s Secret shares already had surged roughly 160% over the past year as investors embrace Super’s efforts to revitalize the brand.
The updated outlook suggests Super’s strategy is building momentum as the company focuses on bras and the Pink brand that’s geared towards younger shoppers. The company recently changed its ticker to VSXY, as part of its repositioning.
Super has had to navigate pressure from investors. Billionaire Brett Blundy’s investment firm BBRC International Pte. has urged shareholders to vote against board chair Donna James as it has criticized the company’s management oversight for poor decision making that led to years of declining sales.
Victoria’s Secret bras have gained market share specifically with 18- to 44-year-olds, Super said in an interview. “Our consumer is incredibly robust,” she added, noting that retailer has seen the biggest growth in the under-$50,000 and over-$200,000 annual income categories. Executives also noted higher regular price selling in the quarter on a call with analysts.
Sales guidance for the second quarter is also ahead of estimates.
Jefferies analyst Corey Tarlowe said the company’s results reinforce “a clear inflection in the business,” noting that it’s retaining core customers and attracting new ones.
Super said she has only communicated with BBRC in quarterly investor meetings. Barington Capital, an activist investor that previously pushed for change at the company, has since divested.
