L Brands Issues Bleak Outlook Amid Victoria's Secret Weakness
February 22 2017 - 5:53PM
Dow Jones News
By Anne Steele
L Brands Inc. issued a disappointing outlook for the year as its
core lingerie business continued to lag behind amid its exit from
swim wear and apparel.
Shares dropped 12% after hours to $51.30. The stock had already
lost 31% of its value over the past 12 months through Wednesday's
close.
The company guided for 2017 full-year earnings of between $3.05
and $3.35 a share, including earnings between 20 cents and 25 cents
in the first quarter -- short of the $3.61 and 49 cents,
respectively, that analysts polled by Thomson Reuters had forecast.
L Brands blamed the exit of the swim and apparel categories at
Victoria's Secret, continued investment in China and investment in
real estate at Victoria's Secret and Bath & Body Works.
L Brands also now expects to report a mid-to-high-teens decrease
in February comparable sales, below expectations for a
mid-single-digit decrease, reflecting a decline of about 20% at
Victoria's Secret and a mid-single-digit decline at Bath & Body
Works.
Victoria's Secret continued to struggle during the period, with
comparable sales falling 3%, compared with a 7% rise a year
earlier. Longtime Chief Executive Leslie Wexner took over the
segment last February and has been trying to scale back promotions
and narrow merchandise offerings. The January report raises further
questions about whether those efforts are taking hold.
Same-store sales in the much smaller Bath & Body Works
segment, meanwhile, rose 5%, compared with 7% the year before.
In all, L Brands reported a profit of $631.7 million, down from
$636 million a year earlier. On a per-share basis, earnings rose to
$2.18 from $2.15 on a lower share count.
Excluding a favorable tax settlement of 14 cents a share,
adjusted earnings fell to $2.03 a share. The company had most
recently guided for earnings of $1.90 a share.
Earlier this month, L Brands reported revenue rose 2.1% to $4.49
billion. Total same-store sales were flat in the quarter, hurt by
the exit of the swim and apparel categories.
Many retailers have been reporting lackluster sales that are
largely the result of lower traffic as more shoppers move online,
especially to Amazon.com, and as fast-fashion chains like Hennes
& Mauritz AB grab market share.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
February 22, 2017 17:38 ET (22:38 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
L Brands (NYSE:LB)
Historical Stock Chart
From Mar 2024 to Apr 2024
L Brands (NYSE:LB)
Historical Stock Chart
From Apr 2023 to Apr 2024