Victoria’s Secret & Co. (NYSE: VSCO) today announced that it has entered into an accelerated share repurchase agreement (“ASR”) with Goldman Sachs & Co. LLC (“Goldman Sachs”) to repurchase $250 million of the Company’s common stock. The Company also reaffirmed fourth quarter sales, operating income and earnings guidance.
Under the ASR, the Company will make an initial payment of $250 million 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 pursuant to the terms of the ASR. The final settlement of the ASR is expected to be completed in the first quarter of 2022.
The Company reaffirmed the fourth quarter guidance provided on November 17, 2021 which forecasted sales to be in the range of flat to up 3% versus last year’s fourth quarter sales of $2.100 billion, operating income to be in the range of $295 million to $335 million and diluted earnings per share to be in the range of $2.35 to $2.65.
CEO Martin Waters commented, “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.”
Mr. Waters continued, “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.”
I have over 10 years of experience in the retail industry including expertise in marketing, operations, merchandising, buying, shopping and technology. I am a former senior managing director of The School of Retailing, University of Alberta. My education includes a Bachelor of Commerce Degree from The University of Alberta in Marketing, Certificate in Real Estate and a Diploma in Fashion Merchandising and Buying from LasSalle College, a Canadian private school founded in 1959 by fashion designer Jean-Paul Morin.