Victoria's Secret parent L Brands reports poor January sales, cuts dividend
Fashion retail group L Brands Inc. kicked off the year with slow January results, again recording declines in its struggling lingerie brand Victoria's Secret.
The Columbus, Ohio-based company reported a comparable sales drop (stores and direct) of 1 percent in January, driven by an 7 percent drop in store-only comps. In turn, the group also cut its regular quarterly dividend in half to $0.30 per share.
The reported net sales of $780.1 million for the four weeks ended Feb. 2, 2019, were also down compared to net sales of $1.040 billion, reported during the same period last year.
Again, its two main brands - Victoria’s Secret and Bath & Body Works – posted contrasting results with the lingerie brand continuing to struggle. Meanwhile, personal care brand Bath & Body Works once again offset the overall fall in sales witnessed by the L Brands group for the opening month of 2019.
Victoria’s Secret saw comparable sales drop 1 percent during the month, while store sales fell 8 percent, compared to last year where sales were overall flat.
For the full fourth quarter, sales fell at Victoria’s Secret to $2.5 billion from $2.6 billion seen a year earlier. Both comparable and store sales for the quarter were also down by 3 and 7 percent.
Meanwhile, Bath & Body Works reported flat comparable sales and declining store sales of 4 percent for the month.
However, looking at the fourth quarter, Bath & Body Works sales rose to $1.95 billion from $1.79 billion, with both comparable and store sales for the quarter up 12 and 8 percent respectively.
Likewise, overall annual net sales for the group reached $13.2 billion for the 52-week year ended Feb. 2, up from $12.6 billion last year. For the 52-week period, comps increased 3 percent.
Bath & Body Works has consistently been tasked with compensating for Victoria’s Secret underwhelming performances. The brand appears dated to progressive shoppers, due to its non-inclusive approach, ignoring the lingerie sector's push towards inclusivity and body positivity.
Still, some recent initiatives show a recent change in voice. Earlier this month, the lingerie giant's ‘Pink' lifestyle division has announced the launch of its inaugural ‘Grl Pwr' project, an initiative that aims to help jumpstart the futures of trendsetting women between the ages of 18 and 25.
"The Grl Pwr Project is a natural extension of the Pink brand -- we are looking to help fund the dreams of young women who exemplify ambition, optimism and confidence," said Pink's CEO Amy Hauk in a statement on the initiative. "Our goal is to celebrate, support and inspire young women everywhere by encouraging our customer to find their voice in society and achieve their full potential."
The company has opened 88 new stores since last year and closed or sold 220, meaning that it currently operates a total of 2,943 locations across the U.S., Canada, the UK, Ireland and China.
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