Victoria's Secret Owner Lifts Outlook on Strength of Bath & Body Works
May 22 2019 - 5:40PM
Dow Jones News
By Micah Maidenberg
L Brands Inc. raised its profit outlook for the year as the
retailer beat overall sales targets in the latest quarter thanks to
Bath & Body Works.
The Columbus, Ohio-based retailer said Wednesday that comparable
sales for Bath & Body Works, which include sales from
company-owned stores in North America open at least a year and
digital sales, jumped 13% in the fiscal first quarter.
Overall, L Brands reported net sales of $2.63 billion in its
quarter that ended May 4, flat compared with a year earlier.
Analysts polled by FactSet expected $2.56 billion.
Shares of L Brands shot up about 13% in after-hours trading.
Victoria's Secret, however, continued to struggle, with
comparable sales dropping 5%. L Brands has been trying to turn
around the business, which lost ground as its emphasis on racy
undergarments and skinny supermodels fell out of fashion.
Last November, the company announced a new chief executive to
lead the brand and halved its annual dividend to save cash.
L Brands reported a profit of $40.3 million, or 14 cents a
share, for the latest quarter, down from $47.5 million, or 17 cents
a share, a year earlier.
The company increased the low end of its profit outlook for its
current fiscal year by 10 cents to $2.30 a share.
In March, activist investor Barington Capital Group LP urged L
Brands to consider splitting its Bath & Body Works business
from Victoria's Secret. The hedge fund also called on L Brands to
replace board members to improve the diversity and independence of
the board.
Under a deal struck in April, L Brands agreed to make Barington
a special adviser to the company while Barington agreed to support
the company's slate to the board.
The company has been trimming its portfolio of Victoria's Secret
stores, closing 35 of those shops in the U.S. in its latest
quarter. Meanwhile, it opened a net 11 Bath & Body Works in the
U.S.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
May 22, 2019 18:25 ET (22:25 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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