L Brands earnings fall short in Q3, Victoria Secret sales still down
L Brands Inc. reported on Wednesday mixed financial results, as Victoria’s Secret sales continued to fall in its third quarter. The parent company of Victoria’s Secret and the Bath & Body Works chain saw net sales rise in the quarter, while nearly all other results fell.
L Brands saw earnings fall 29 percent to $0.30 for the third quarter ended October 28, 2017. Overall, the company said net sales still rose 1 percent to $2.618 billion, compared to $2.581 billion for the quarter ended Oct. 29, 2016. Comparable sales however decreased 1 percent, while store only comps also decreased 3 percent year over year.
Net income dropped 29 percent to $86 million.
For another quarter, the company blamed the exit of Victoria’s Secret’s swim and apparel categories, which had a negative impact of about 2 percentage points to both total company and Victoria’s Secret comparable sales.
Victoria’s Secret sales were down 4 percent, but were offset by a 4 percent gain for L Brands’ personal care stores, Bath & Body Works.
Victoria's Secret store sales slipped to $1,243 million, while direct sales equally fell 0.8 percent to $295.3 million.
The company has been working to streamline the Victoria's Secret business since 2016. L Brands made some strategic changes in April 2016, which included the creation of three units within its Victoria's Secret business - Victoria's Secret Lingerie, Pink and Victoria's Secret Beauty - and the elimination of certain merchandise categories such as swimwear and apparel.
Meanwhile, Bath & Body Works' total sales rose 6 percent to $815.8 million with a 4 percent climb in comparable store and direct sales.
The company stated that it expects 2017 fourth quarter earnings per share to be $1.95 to $2.10, or $3.05 to $3.20 for the full year 2017.
L Brands operates 3,087 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China, and its brands are sold in more than 800 additional franchised locations worldwide. The company also owns brands La Senza and Henri Bendel.
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