Victoria’s Secret lifts guidance with positive start to holidays

VICTORIA’S Secret raised its outlook after reporting third-quarter sales that topped Wall Street expectations, saying shoppers had an early positive response to its holiday merchandise.

Revenue will rise as much as 2 per cent this year, the largest US lingerie retailer said. That’s up from a previous outlook calling for a drop of 1 per cent. Meanwhile, annual adjusted operating income will be as much as US$345 million, a 15 per cent bump from what the company said earlier this year.

The earnings report marked the first under Hillary Super, who the company named chief executive officer in August to lead the chain’s turnaround. Investors have high expectations for her, with the stock surging since the retailer poached her away from Rihanna’s lingerie brand.

Super has a lot of work to do. Victoria’s Secret has been struggling for years, dogged by waning demand and increased competition from upstart lingerie brands. There were also allegations of workplace misconduct.

The chain surpassed expectations last quarter with good inventory management and cost controls, Super said. Revenue in the three months to Nov 2. rose to US$1.35 billion, topping the average analyst estimate of US$1.3 billion.

Shares of Victoria’s Secret were little changed at 5 pm in post market trading in New York. The stock had gained 62 per cent this year as at Thursday’s close, compared to a 27 per cent rise in the S&P 500 Index. BLOOMBERG

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