L Brands (NYSE:LB) shares shot up Friday after the company hiked its profit outlook for the current quarter, and said it would be reinstating an annual dividend, paying down debt and buying back shares.
L Brands said in the press release that it plans to repay $1.03 billion of debt using $1.1 billion of cash on hand. The company also announced a fresh $500 million share buyback plan to replace its existing program, which has $79 million remaining on it.
L Brands, which owns the Victoria’s Secret lingerie brand as well as Bath & Body Works, also said it will reinstate its annual dividend of 60 cents per share, beginning with a quarterly dividend paid in June.
Building on the momentum it saw over the holidays, L Brands now forecasts first-quarter earnings per share to fall within a range of 55 cents to 65 cents, up from a prior range of 35 cents to 45 cents.
CEO Andrew Meslow said in a statement that, while the current retail environment remains uncertain during the COVID pandemic, the company was able to raise its outlook due to the strong sales and profits it has seen quarter-to-date.
L Brands shares are up more than 180% over the past 12 months. The company has a market cap of $15.53 billion. They began Friday up $4.24, or 7.6% to $60.09.