L Brands’ Q1 easily top Street; raises 2019 guidance
Bath & Body Works helped drive L Brands to an unexpected earnings beat in its first quarter even as Victoria’s Secret’s sales remained in decline.
L Brands’ earnings totaled $40.255 million, or 14 cents a share, in the quarter ended May 4, from $47.517 million, or 17 cents a share, in the year-ago period. The results crushed analysts’ estimates, which called for breakeven results on a per-share basis.
Net sales inched up to $2.628 billion, in line with estimates, from $2.625 billion last year. Overall same-store sales were flat, which was better than the 1.3% decline analysts had expected. Comp sales increased 13% at Bath & Body Works.
But Victoria’s Secret got little relief as comp sales fell 5%, compared to a 3% drop in its fourth quarter. In February, L Brands announced plans to close some 53 underperforming Victoria’s Secret stores in North America this year. The company has been working to improve the image and performance of the chain, and it reportedly has pulled the plug on Victoria’s Secret’s annual televised fashion show.
On L Brands’ conference call with investors on Thursday, CFO Stuart Burgdoerfer noted that the company has been consistent for some time in saying that “everything is on the table” with respect to the evaluation of the Victoria's Secret business.
“And that wasn't just a throw-away phrase,” Burgdoerfer said. “That was a real reflection of our mindset. And so, we are taking a fresh hard look at all aspects of the business, and that's not a one-time exercise.”
Although Burgdoerfer did not go into specific details about any upcoming changes, he said that consumers could expect to see “substantial changes” to the merchandise assortment starting in August.
L Brands raised its guidance for 2019 earnings per share to between $2.30 and $2.60, from a previous outlook of between $2.20 and $2.60.
L Brands’ earnings totaled $40.255 million, or 14 cents a share, in the quarter ended May 4, from $47.517 million, or 17 cents a share, in the year-ago period. The results crushed analysts’ estimates, which called for breakeven results on a per-share basis.
Net sales inched up to $2.628 billion, in line with estimates, from $2.625 billion last year. Overall same-store sales were flat, which was better than the 1.3% decline analysts had expected. Comp sales increased 13% at Bath & Body Works.
But Victoria’s Secret got little relief as comp sales fell 5%, compared to a 3% drop in its fourth quarter. In February, L Brands announced plans to close some 53 underperforming Victoria’s Secret stores in North America this year. The company has been working to improve the image and performance of the chain, and it reportedly has pulled the plug on Victoria’s Secret’s annual televised fashion show.
On L Brands’ conference call with investors on Thursday, CFO Stuart Burgdoerfer noted that the company has been consistent for some time in saying that “everything is on the table” with respect to the evaluation of the Victoria's Secret business.
“And that wasn't just a throw-away phrase,” Burgdoerfer said. “That was a real reflection of our mindset. And so, we are taking a fresh hard look at all aspects of the business, and that's not a one-time exercise.”
Although Burgdoerfer did not go into specific details about any upcoming changes, he said that consumers could expect to see “substantial changes” to the merchandise assortment starting in August.
L Brands raised its guidance for 2019 earnings per share to between $2.30 and $2.60, from a previous outlook of between $2.20 and $2.60.