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Victoria's Secret announces 250 million dollar share repurchase program

By Kristopher Fraser

Dec 29, 2021


Image: Victoria's Secret

Victoria’s Secret & Co. has entered into an accelerated share repurchase agreement (“ASR”) with Goldman Sachs & Co. LLC (“Goldman Sachs”) to repurchase 250 million dollars of the company’s common stock. Victoria’s Secret also reaffirmed fourth-quarter sales, operating income, and earnings guidance.

Under the ASR, Victoria’s Secret will make an initial payment of 250 million dollars to Goldman Sachs and will receive an initial delivery of approximately 4.1 million shares of the company’s common stock on December 31, 2021. The final number of shares to be repurchased will be based on the volume-weighted average price of the company’s common stock during the term of the ASR less a discount and subject to adjustments under the terms of the ASR. The final settlement of the ASR is expected to be completed in the first quarter of 2022.

Victoria’s Secret reaffirmed the fourth quarter guidance provided on November 17, 2021, which forecasted sales to be in the range of flat to up 3 percent versus last year’s fourth-quarter sales of 2.1 billion dollars, operating income to be in the range of 295 million dollars to 335 million dollars and diluted earnings per share to be in the range of 2 dollars and 35 cents to 2 dollars and 65 cents.

In a statement, CEO Martin Waters said, “I am very pleased with our fourth-quarter performance to date and believe we have solid plans in place for the balance of this holiday selling season. I was particularly encouraged by our sales growth during the peak shopping days over the Thanksgiving weekend and the large rush of business as we approached December 25th. Our stores are in a good inventory position as we begin our semi-annual sale and anniversary the positive stimulus impact on sales in January of last year. Performance has been broad-based across all of our businesses, and our stores channel has been a position of strength for our results. The teams have executed well and focused on what we can control in this challenging supply chain environment, and I could not be more proud of our efforts.”

He added that, “Over the past few months, we have stabilized our business and created a platform for future growth while generating significant cash flow. Our financial stability and cash flow potential are pillars of strength and competitive advantages. With the unanimous support of our board of directors, we are announcing our first-ever share repurchase. We believe this share repurchase reflects our confidence in the Company and is another step on our journey to create long-term, sustainable value for our shareholders.”