Victoria’s Secret & Co. Plans $125 Million Accelerated Share Repurchase Program
January 31 2023 - 6:45AM
Victoria’s Secret & Co. (“Victoria’s Secret” or the “Company”)
(NYSE: VSCO) today announced that it plans to enter into an
accelerated share repurchase agreement (“ASR”) with Goldman Sachs
& Co. LLC (“Goldman Sachs”) to repurchase $125 million of the
Company’s common stock.
Under the terms of the ASR, the Company will
make an initial payment of $125 million to Goldman Sachs and will
receive an initial delivery of approximately 2.5 million shares of
the Company’s common stock on February 3, 2023. 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 second quarter of 2023. The planned ASR is a
component of a broader share repurchase program announced on
January 11, 2023 (“January 2023 Share Repurchase Program”)
authorizing the repurchase of up to $250 million of the Company’s
common stock. Shares acquired through the January 2023 Share
Repurchase Program will be available to meet obligations under
equity compensation plans and for general corporate purposes.
Concurrent with the announcement of the planned
ASR, the Company is increasing its fourth quarter 2022 sales,
operating income, and earnings per share guidance. Operating income
is now forecasted to be in the range of $265 million to $275
million, or approximately 13% to 14% of sales, and above its
previously communicated guidance range of $245 million to $265
million. The Company now expects net income for the fourth quarter
2022 to be in the range of $2.25 to $2.35 per diluted share, higher
than its previously communicated guidance range of $2.05 to $2.25
per diluted share. Consistent with this level of profitability, the
Company expects a net sales decline in the range of 7% to 8%, or
better than prior guidance of a high-single digit decline, compared
to last year’s fourth quarter net sales of $2.175 billion. All
updated fourth quarter 2022 guidance excludes the financial impact
of the recent acquisition of AdoreMe, Inc. (“Adore Me”), as well as
transaction costs and purchase accounting related to this
transaction.
CEO Martin Waters commented, “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. With diligent focus, we
accomplished this outcome and will end the year with inventory
levels down low double digits when accounting for modal mix shifts,
and expect an expense outcome at the better end of our range. Our
teams are clearly controlling what we can control and I am proud of
their efforts during these difficult times.”
Martin continued, “As we turn the page to the
new year, we recognize the economic environment is not ideal and
may cause 2023 results to look similar to the year we just
finished. However, we are evolving and innovating our business and
have organic growth strategies and new customer experiences well
identified and ready to launch during 2023. We have a recently
acquired business in Adore Me with double digit growth plans and
with technologies we plan to leverage in our core Victoria’s Secret
and Victoria’s Secret PINK brands. We have an International
business also growing double digits with partner plans for new
stores and new countries planned out through the next two years.
And most importantly, we are a market leader in the intimates
category and are positioned for future growth, both in our core and
with Adore Me now in the family. I could not be more proud of this
team and what we have accomplished together in the last 18 months
during unprecedented times, and I firmly believe we are positioned
for success for many years to come.”
About Victoria’s Secret & Co.
Victoria’s Secret & Co. (NYSE: VSCO) is a
Fortune 500 specialty retailer of modern, fashion-inspired
collections including signature bras, panties, lingerie, casual
sleepwear, athleisure and swim, as well as award-winning
prestige fragrances and body care. VS&Co is comprised of
market leading brands, Victoria’s Secret and Victoria’s Secret
PINK, that share a common purpose of inspiring and uplifting our
customers in every stage of their lives, and Adore Me, a
technology-led, digital-first innovative intimates brand serving
women of all sizes and budgets at all phases of life. We are
committed to empowering our more than 30,000 associates across a
global footprint of approximately 1,350 retail stores in
approximately 70 countries. We provide our customers with products
and experiences that make them feel good inside and out while
driving positive change through the power of our products, platform
and advocacy.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
We caution that any forward-looking statements
(as such term is defined in the U.S. Private Securities Litigation
Reform Act of 1995) contained in this press release or made by us,
our management, or our spokespeople involve risks and uncertainties
and are subject to change based on various factors, many of which
are beyond our control. Accordingly, our future performance and
financial results may differ materially from those expressed or
implied in any such forward-looking statements. Forward-looking
statements include, without limitation, statements regarding our
future operating results, the implementation and impact of our
strategic plans, and our ability to meet environmental, social, and
governance goals. Words such as “estimate,” “commit,” “target,”
“goal,” “project,” “plan,” “believe,” “seek,” “strive,” “expect,”
“anticipate,” “intend,” “potential” and any similar expressions may
identify forward-looking statements. Risks associated with the
following factors, among others, could affect our financial
performance and cause actual results to differ materially from
those expressed or implied in any forward-looking statements:
- the spin-off from Bath & Body
Works, Inc. (f/k/a L Brands, Inc.) may not be tax-free for U.S.
federal income tax purposes;
- we may not realize all of the
expected benefits of the spin-off;
- general economic conditions,
inflation, consumer confidence, consumer spending patterns and
market disruptions including pandemics or significant health
hazards, severe weather conditions, natural disasters, terrorist
activities, financial crises, political crises or other major
events, or the prospect of these events;
- the novel coronavirus (COVID-19)
global pandemic has had and may continue to have an adverse effect
on our business and results of operations;
- difficulties arising from turnover
in company leadership or other key positions;
- our ability to attract, develop and
retain qualified associates and manage labor-related costs;
- our dependence on mall traffic and
the availability of suitable store locations on appropriate
terms;
- our ability to successfully operate
and expand internationally and related risks;
- our independent franchise, license,
wholesale, and joint venture partners;
- our direct channel business;
- our ability to protect our
reputation and the image of our brands;
- our ability to attract customers
with marketing, advertising and promotional programs;
- the highly competitive nature of
the retail industry and the segments in which we operate;
- consumer acceptance of our products
and our ability to manage the life cycle of our brands, keep up
with fashion trends, develop new merchandise and launch new product
lines successfully;
- our ability to realize the
potential benefits and synergies sought with the acquisition of
AdoreMe, Inc.;
- our ability to source, distribute
and sell goods and materials on a global basis, including risks
related to:
- political instability,
environmental hazards or natural disasters;
- significant health hazards or
pandemics;
- legal and regulatory matters;
- delays or disruptions in shipping
and transportation and related pricing impacts; and
- disruption due to labor
disputes;
- our geographic concentration of
vendor and distribution facilities in central Ohio and Southeast
Asia;
- the ability of our vendors to
deliver products in a timely manner, meet quality standards and
comply with applicable laws and regulations;
- fluctuations in freight, product
input and energy costs, including those caused by inflation;
- our and our third-party service
providers’ ability to implement and maintain information technology
systems and to protect associated data and system
availability;
- our ability to maintain the
security of customer, associate, third-party and company
information;
- stock price volatility;
- shareholder activism matters;
- our ability to maintain our credit
rating;
- our ability to comply with
regulatory requirements; and
- legal, tax, trade and other
regulatory matters.
Except as may be required by law, we assume no
obligation and do not intend to make publicly available any update
or other revisions to any of the forward-looking statements
contained in this press release to reflect circumstances existing
after the date of this press release or to reflect the occurrence
of future events, even if experience or future events make it clear
that any expected results expressed or implied by those
forward-looking statements will not be realized. Additional
information regarding these and other factors can be found in “Item
1A. Risk Factors” in our Annual Report on Form 10-K and Quarterly
Report on Form 10-Q filed with the Securities and Exchange
Commission on March 18, 2022 and December 2, 2022,
respectively.
For further information, please contact:
Victoria’s Secret & Co.: |
|
Investor Relations: |
Media Relations: |
Kevin Wynk |
Brooke Wilson |
investorrelations@victoria.com |
communications@victoria.com |
|
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