L Brands (LB) Posts Soft Holiday Sales, Trims Earnings View
Zacks Investment Research | Jan 09, 2020 09:53PM ET
L Brands, Inc. (NYSE:LB) disappointed with its holiday season performance. Weak sales number at Victoria's Secret brand hurt the company’s overall performance. Even strength witnessed in Bath & Body Works failed to act as a savior. Consequently, management trimmed its fourth-quarter fiscal 2019 earnings projection.
This Columbus, OH-based company posted net sales of $3.906 billion for the nine weeks ended Jan 4, 2020, reflecting year-over-year decline of 4.1%. Comparable sales fell 3% during the aforementioned time frame against an increase of 4% reported in the year-ago period.
The company has been grappling with softness at the Victoria’s Secret brand due to stiff competition and consumers’ changing preferences, and reflection of the same was visible in the holiday sales number. The segment’s comparable sales dropped 12% during the November and December period compared with a decline of 4% in the prior-year period.
Nonetheless, solid performance at Bath & Body Works brand did provide some cushion. The segment put up a stellar show with 9% jump in comparable sales. In the year-ago period, Bath & Body Works had registered comparable sales increase of 14%.
But this was not enough to stop L Brands from slashing its earnings per share view for the final quarter. The company now envisions earnings to be $1.85, down from the prior estimate of $2.00. The current Zacks Consensus Estimate for the quarter under review stands at $1.98, which could witness a downward revision in the coming days.
Wrapping Up
L Brands is struggling to make a comeback in the wake of rising competition from the likes of ThirdLove, Adore Me, Lively, and True & Co. Further, the company has often been accused of failing to bring in trendy merchandise by industry experts. Clearly, continued sluggishness in Victoria’s Secret has been taking a toll on its performance.
Nevertheless, the company is leaving no stone unturned to revive its Victoria’s Secret brand. Product launches, increased focus on omnichannel capabilities and improved marketing strategies are some of the notable moves in this direction. Also, L Brands has been gaining from Bath & Body Works.
We note that shares of this Zacks Rank #3 (Hold) have increased 8.3% compared with the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.