Victoria's Secret parent L Brands Inc. shares on Thursday rose 4.4% to $90.29, an all-time high, after it reported a better-than-expected 7% increase in January same-store sales and raised its outlook for the holiday quarter. At Victoria's Secret, sales rose 4% on top of a 10% increase a year earlier. Margins increased significantly from a year earlier after the lingerie chain sold more products at full price and reduced its semi-annual sale inventory level. At Bath & Body Works, sales surged 16%. LB projected fourth-quarter profit of as much as $1.80 a share, up from its prior guidance of as much as $1.71 a share. L Brands raised its annual dividend by 47% to $2 a share. It also will issue a $2 special dividend and plan to buy back up to $250 million shares in a new repurchase program. However, some analysts said further upside is limited. "The current share price reflects an optimistic outlook for earnings growth, with little margin for error," said Stifel analyst Richard Jaffe, who rates the stock a hold.
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