Victoria's Secret stock surges on new CEO, preliminary results

Victoria's Secret & Co. (VSCO) saw its stock jumped as much as 20% premarket Wednesday following the announcement of Hillary Super as the new CEO, effective September 9, 2024, and its preliminary second-quarter results.

Super, a seasoned retail executive with extensive experience in leading high-profile brands like Savage X Fenty and Anthropologie, will succeed Martin Waters in the role.

The market responded positively to Super's appointment and the results. Investors are optimistic about her ability to drive growth and enhance shareholder value.

Donna James, Chair of the Board, expressed confidence in Super's "merchant leadership capabilities" and her "intuitive understanding of the consumer landscape," qualities seen as vital for the company's next growth phase.

The leadership change comes alongside the release of preliminary results for the second quarter of 2024, which exceeded expectations.

The company reported a projected adjusted operating income of $57 to $62 million, significantly higher than the previously guided range of $30 to $45 million and above the consensus estimate of $40.7 million.

Adjusted earnings per share (EPS) are also expected to surpass initial forecasts, ranging between $0.34 and $0.39, compared to the previous guidance of $0.05 to $0.20. The consensus EPS estimate was $0.16.

Timothy Johnson, Chief Financial and Administrative Officer, who is serving as interim CEO, highlighted the company's strong performance, noting improved sales trends in North America and successful product launches, including the Victoria's Secret Dream bra collection.

"We were encouraged by the continued sequential improvement in quarterly sales results in North America for the fourth consecutive quarter, as sales trends improved in both our stores and digital channels," he stated.

He added: "Improving product acceptance and disciplined inventory management led to strong margin performance and our teams continue to relentlessly focus on improving our cost structure, the combination of which has driven year-over-year quarterly operating income growth for the first time since 2021."

Victoria's Secret plans to share more details during its earnings call on August 29, but the market is already bullish on the brand's renewed direction under its new leadership.

Source: Investing.com