Victoria's Secret (VSCO) saw its shares jump more than 6% in premarket trading Friday after the company reported better-than-expected preliminary Q1 results.
The lingerie and beauty retailer preannounced adjusted earnings per share (EPS) in the range of $0.07 to $0.12, exceeding the company's guidance of -$0.15 to $0.10 and better than the consensus estimate of -$0.03.
Net sales are projected to decline by 3% to 4%, which is also an improvement over the anticipated decline of 4% to 6%.
Victoria’s Secret said April was the strongest month of the quarter for the company, citing “improving trends throughout the quarter.”
“Not for nothing, this better-than-feared report comes amid growing consumer concerns at-large and following four recent Analyst downgrades to Sell, and one initiation at Sell for VSCO specifically since last earnings,” analysts at BMO Capital Markets said in a note released after the preannouncement.
“Recognizing this positive surprise still represents a revenue decline, we believe VSCO continues to under-earn and trade at a peer-low multiple.”