Victoria's Secret parent L Brands (LB) - Get Report soared after the company planned to shutter more 250 stores in the U.S. and Canada after the struggling retailer was battered by the coronavirus pandemic.
Shares were climbing 17.6% to $14.37.
L Brands said it would permanently close 250 Victoria’s Secret and Pink stores in the U.S. and Canada in 2020. The company also said it plans to permanently close 50 Bath & Body Works shops this year.
The company has about 1,070 Victoria’s Secret and Pink locations in North America.
"As part of our strategy to increase shareholder value, we remain committed to establishing Bath & Body Works as a pure-play public company,” L Brands said in a statement, “and we are taking the necessary steps to prepare the Victoria’s Secret Lingerie, Victoria’s Secret Beauty and Pink businesses to operate as a separate, standalone company.”
Interim Victoria’s Secret CEO Stuart Burgdoerfer said during Thursday's conference call with analysts that the company believes "there will be more store rationalization over the next several years as well."
Nearly all of the company's stores have been closed since March 17 due to the pandemic.
L Brands reported a first-quarter loss of $297 million, or $1.07 a share, in the quarter, vs. earnings of $40.3 million, or 14 cents a share, a year ago. Adjusted losses came to 99 cents a share. Sales totaled $1.7 billion from $2.6 billion a year ago.
The FactSet consensus called for an adjusted loss of 67 cents a share on sales of $1.8 billion.
"Given the high level of uncertainty in the current environment, the company is not providing second quarter or full-year 2020 earnings guidance," L Brands said.
Earlier this month, the company said it was calling off its deal to sell a controlling interest in Victoria’s Secret to Sycamore Partners.