(Bloomberg) — Victoria’s Secret & Co. shares soared the most ever after the company beat earnings estimates and boosted its outlook, adding to signs that Chief Executive Officer Hillary Super’s turnaround plan is on track.
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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 in the latest quarter and guidance for the current quarter also surpassed forecasts.
The stock surged 47% — a record high as well as the biggest gain ever — at the close on Tuesday. Roughly 19% of the company’s tradeable shares are shorted, according to data from S3 Partners, a level that renders securities more volatile.
With Tuesday’s gain, Victoria’s Secret shares have nearly quadrupled in value over the past year as investors reward Super’s efforts to revitalize the brand.
The improved outlook shows her strategy is working as the company focuses on bras and the Pink brand that’s geared toward 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 and has criticized the company’s management oversight for poor decision-making that led to years of declining sales.
That weakness now appears to be in the rearview mirror, with the company posting four consecutive quarters of annual revenue growth.
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 the retailer has seen the biggest growth in the under-$50,000 and over-$200,000 annual income categories. Executives also pointed to higher sales of non-discounted merchandise in the quarter during their call with analysts.
Jefferies analyst Corey Tarlowe said the results reinforce “a clear inflection in the business,” adding that Victoria’s Secret is retaining core customers while attracting new ones.
Victoria’s Secret’s shareholder vote is scheduled to take place June 11 during the company’s annual meeting.
