L Brands (LB) - Get Report was trading higher Friday after the parent of Victoria's Secret, Pink and Bath & Body Works raised its fiscal first-quarter guidance as sales got a shot in the arm from government stimulus checks, easing COVID-19 restrictions and other factors.
Shares of the Columbus, Ohio, company were climbing 5.2% to $62.50 in premarket trading.
L Brands said it now expects first-quarter earnings to range from 85 cents to $1 a share, up from a previous range of 55 cents to 65 cents.
The FactSet consensus of analysts is calling for earnings of 62 cents a share. L Brands is scheduled to report first-quarter results on May 20.
President Joe Biden signed the stimulus package earlier this month. Millions of Americans will receive $1,400 stimulus checks, enhanced unemployment benefits will be extended and funding for vaccine distribution and the reopening of schools will be ramped up.
"The environment remains uncertain, and there is no assurance that these improved trends will continue," L Brands said in a statement.
Earlier this month, L Brands raised its first-quarter guidance and unveiled steps to repay debt, buy back shares and reinstate its annual dividend.
The company's board also authorized repayment of $1.04 billion of debt by calling $285 million of bonds outstanding due Feb. 15, 2022, and $750 million of secured bonds outstanding due July 1, 2025.
The board also approved a new $500 million share buyback plan, replacing a previously authorized plan with $79 million remaining.
In March 2020, L Brands said that it was suspending its dividend and furloughing most store staff as a result of the coronavirus pandemic.
In February, L Brands reported better-than-expected fourth-quarter results and offered upbeat guidance as operating income more than doubled at its Victoria’s Secret unit.