L Brands cuts annual dividend, appoints new Victoria's Secret CEO
today Nov 20, 2018
While it hurries to revamp its flagship Victoria’s Secret brand, L Brands Inc. announced Monday that it will cut its annual ordinary dividend in half and hire a Tory Burch executive to help lead the lingerie chain.
The Columbus, Ohio-based fashion retail group said that it will cut its dividend to $1.20 from $2.40, currently.
Still, it beat profit expectations with adjusted earnings per share of $0.16, for the third quarter ended November 3, 2018.
The company reported net sales of $2.775 billion for the 13 weeks, up 6 percent, compared to net sales of $2.618 billion for the quarter ended Oct. 28, 2017.
Meanwhile, comparable sales increased 4 percent.
Comparable sales at Victoria’s Secret, L Brands’ biggest division by revenue, were still down 2 percent. Instead, it was instead the group’s other brands Bath & Body Works (up 13 percent) that pulled the company out of hot water, reporting a fiscal third-quarter loss of $42.8 million.
The company also announced that it named John Mehas CEO of Victoria’s Secret Lingerie, effective early 2019. He will replace Jan Singer, who resigned earlier this month.
Mehas is currently serving as president of Tory Burch, the iconic lifestyle brand. Previously, Mehas led Club Monaco, a Polo Ralph Lauren brand, for 13 years as president and CEO.
“During the quarter, we made some tough decisions that enable us to increase our focus on our core businesses and highest growth opportunities,” explained Leslie Wexner, L Brands chairman and CEO.
“These actions, including the closure of the Henri Bendel business and the pursuit of alternatives for La Senza, will strengthen our company in the long-term. Looking ahead, we remain focused on executing our strategy, sticking to the fundamentals of our business, staying close to our customers and leveraging the strength of our brands to deliver on our commitments for our customers, associates and stakeholders.”
Looking ahead, the company said it expects fourth-quarter earnings per share to be $1.90 to $2.10. It also increased its full year 2018 adjusted earnings per share guidance to $2.60 to $2.80 from $2.45 to $2.70, previously.
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