Why Victoria's Secret Shares Are Trading Higher

Victoria's Secret & Co VSCO shares are trading higher Tuesday morning after the company entered into an accelerated share repurchase program and raised its fourth-quarter outlook.

What To Know: Under the accelerated buyback, Victoria's Secret will make an initial payment of $125 million to Goldman Sachs and receive approximately 2.5 million shares on Feb. 3. The accelerated program is expected to be completed in the second quarter.

This planned accelerated buyback is a component of a broader share repurchase program announced on Jan. 11, which authorized the repurchase of up to $250 million of the company's common stock.

"Our teams executed our strategies very well against a challenging economic environment for our customer during the holiday quarter. Our sales performance was at the better end of our guidance with margins solidly in line with our expectations despite our response to a very promotional environment during the holiday season," said Martin Waters, CEO of Victoria's Secret.

Victoria's Secret raised its fourth-quarter outlook. The company expects fourth-quarter earnings to be between $2.25 and $2.35 per share versus estimates of $2.34 per share. The company previously guided for earnings in a range of $2.05 to $2.25 per share. 

Victoria's Secret also expects fourth-quarter revenue to be better than its previous forecast for a high-single digit decline. The company now anticipates a decline in a range of 7% to 8%. Victoria's Secret also raised its operating income outlook to a range of $265 million to $275 million, up from a range of $245 million to $265 million.

See Also: Nasdaq, S&P Futures Lower As Powell & Team Kick Off 2-Day Fed Meeting: Analyst Says Positive January Harbinger Of Good Times

VSCO Price Action: Victoria's Secret has a 52-week high of $65.20 and a 52-week low of $26.14.

The stock was up 3.55% at $40 at time of publication, according to Benzinga Pro.

Photo: jacqueline macou from Pixabay.