Why Victoria's Secret Stock Jumped 13.5% at the Open Today

Shares of lingerie retailer Victoria's Secret (NYSE: VSCO) popped at the open on June 1, gaining 13.5% in the first few minutes of trading. The big news was the company's first-quarter 2022 earnings release, which hit the market after the close on May 31. The results were kind of mixed, but there was still an important underlying positive here.

Victoria's Secret posted sales of $1.48 billion in the first quarter of 2022. That was down 4.5% compared to the first quarter of 2021, a period boosted by government stimulus payments. On the bottom line, the company reported earnings per share of $0.93, down from $1.97 in the previous year. Adjusting for one-time items, earnings per share came in at $1.11, better but still notably lower. A key drag on the company's results was inflation, which increased supply chain costs and thus crimped margins. So far, this looks pretty negative. But it gets worse: Management is taking a cautious stance with its second-quarter forecast. Sales are expected to be roughly in line with the previous year, but earnings will be notably lower because of the aforementioned margin crunch.

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Source Fool.com