Victoria’s Secret’s recent return to its sexy advertising style has significantly boosted sales and stock prices on Tuesday. This shift contrasts starkly with the profit decline following the company’s earlier campaign, dubbed Awakening Destiny.
By Tuesday afternoon, the stock had climbed by 48% following a robust earnings report.
The 49-year-old brand announced a 15% sales increase for the first quarter and has updated its outlook for the rest of the year.
“We are increasingly confident in the trajectory of our business,” CEO Hilary Super stated in her remarks.
Super has led Victoria’s Secret back to its sensual roots, a move spurred by a rebranding that went sideways during the #MeToo movement, which left many longtime customers feeling alienated.
She noted that bra sales are currently the backbone of their business, with many customers also adding additional items to their carts and visiting stores more frequently.
However, it’s worth mentioning that 19% of the company’s tradable shares were sold short; a report from Bloomberg, referencing S3 Partners, suggests this could lead to a surge in stock value.
The company also revealed on Tuesday that it repurchased 2.2 million shares in the first quarter for $100 million, averaging $45.27 per share.
Victoria’s Secret, traded under the ticker VSXY after its rebranding, has seen its stock rise about 160% over the past year.
Amid various product missteps and customer backlash over ties to former chairman Les Wexner and Jeffrey Epstein, the brand is trying to walk a fine line between being provocatively appealing and off-putting.
Past management distanced itself from the company’s core identity, even scrapping the iconic fashion show. Since the revival of the show, Super has placed emphasis on creating products like new underwire bras made with particularly comfortable materials, while also introducing an “unapologetically sexy” campaign last year.
For the quarter ending May 2, revenue rose from $1.35 billion to $1.56 billion year-over-year, and the company anticipates revenue could reach as high as $7.13 billion this year, up from last year’s record of $6.95 billion.
