Victoria’s Secret puts brakes on L Brands’ sales over the holidays
Following a sharp uptick of 26% in November, Victoria’s Secret parent company L Brands, Inc. has reported slipping sales in December 2018 – a critical holiday shopping period – leading its shares to drop almost 8% on Thursday.
Total net sales for the five weeks ended January 5, 2019 totaled $2.477 billion, down from $2.516 billion in the prior-year period. Comparable sales for the month were flat.
Comps at the company’s struggling Victoria’s Secret brand decreased 6%, compared to a 1% decrease in the same period in 2017, while Bath & Body Works continued to see strong growth, with comps increasing 11%.
For the full 48-week fiscal year, L Brands reported net sales of $12.457 billion, up from $11.592 billion in the previous year, while comparable sales increased 3%.
At Victoria’s Secret, however, comps were still down 2%, although this was nonetheless an improvement when compared to the 9% fall seen in 2017. Comparable sales at Bath & Body Works increased 12% in 2018.
The results reflect a recurring pattern seen at the company in 2018, a year during which strong sales gains at Bath & Body Works have consistently been tasked with compensating for underwhelming performances from Victoria’s Secret, which has been fighting to remain relevant in a lingerie sector increasingly focused on inclusivity and body positivity.
The company now expects its adjusted Q4 earnings per share to be at the higher end of its previously stated guidance of between $1.90 and $2.10. This figure does not take into account a preliminary estimated pretax charge of around $80 million related to the sale of La Senza to an affiliate of Regent LP, which closed on January 6, 2019.
Over the course of 2018, L Brands opened 83 stores and closed 37. The company currently operates 3,121 retail locations in the US, Canada, China, the UK and Ireland.
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