Victoria's Secret & Co's shares rose after the company announced better-than-expected results for the first quarter of 2022, despite enduring a challenging economic environment during the period.
"We are pleased with our first-quarter results and our team’s strong execution. Against the backdrop of significant global headwinds and a challenging inflationary environment, we delivered sales results at the high end of our guidance range and better than expected adjusted earnings per diluted share," chief executive officer Martin Waters said in a statement.
Shares of the company jumped 7.30% in after-hours trading at US$44.22.
Adjusted earnings per share were US$1.11 in the first quarter to 30 April 2022, beating the company's guided range of $0.70-$0.95.
Revenue for the lingerie retailer slipped 4.5% year-over-year to US$1.484bn, within its guided range of a drop of 4%-8%. The company said it faced "supply chain headwinds" during the first quarter, despite an increase in sales from US federal spending a year ago.
Sales increased 4% over the same period in 2020, but were below the US$2.28bn recorded in the fourth quarter of 2019, before the company was spun off from L Brands.
"If the first-quarter sales trends adjusted for stimulus were to continue for the balance of the year, it could challenge our ability to deliver full year operating income in line with last year," Victoria's Secret said in a statement.
The company expects second-quarter sales to either go up or down by a low-single-digit percentage compared with the same period of 2021.
On an adjusted basis, Victoria's Secret expects earnings per share of between US$0.95-US$1.25 in its second quarter. Analysts are forecasting US$1.19 per share for the second quarter and a 1.7% gain for the year.