L Brands manages sales boost in October as Victoria’s Secret continues to drag
As Victoria’s Secret held its annual fashion show this Thursday, its Columbus, Ohio-based parent company L Brands, Inc. reported that the lingerie label’s sluggish performance continued to undermine otherwise strong sales growth in October.
L Brands’ overall net sales totaled $860.5 million in October, up 8% from $794.1 million in the same month in the previous year. Comparable sales for the four-week period increased 4%.
Comparable sales at Victoria’s Secret, however, remained completely flat, offsetting impressive comps growth of 11% at L Brands’ Bath & Body Works brand.
The company also reported that sales in the third quarter ended November 3, 2018, totaled $2.775 billion, a 6% increase from $2.618 billion, reflecting a comparable sales gain of 4%.
Sales at Victoria’s Secret came to $1.529 billion, reflecting a decline in comparable sales of 2%, as the brand has struggled to keep up with its competitors and adapt to the changing tastes of consumers who now prefer simpler, more affordable products. But the brand is hoping that international sales will bolster its faltering domestic performance, as it plans to open a Paris flagship, as FashionNetwork.com recently exclusively revealed.
Meanwhile, a comps increase of 13% drove sales at Bath & Body Works up to $956.2 million.
Year to date, overall company sales rose 7% to $8.385 billion, compared to the $7.809 billion reported in the same nine-month period in the previous year, with comps rising 3%. Here again, a comparable sales decline of 1% at Victoria’s Secret partially offset 3% comps growth at Bath & Body Works.
In light of its latest sales results, L Brands currently expects to report a third-quarter loss per share of around $0.17. This takes into account a pretax cash charge of $20 million related to the closure of its Henri Bendel business, as well as a pretax non-cash impairment charge of $80 million related to certain Victoria’s Secret assets.
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