July 11, 2013
A June swoon hit L Brands as the Columbus-based retailer reported flat comparable-store sales for the month, falling short of Wall Street expectations.
It was the second time in the last three months that L Brands (the temporary name for Limited Brands) missed analyst forecasts, but traders shrugged off the news and sent shares up slightly in morning trades.
L Brands did see sales rise to $1.101 billion in June, up from $1.077 billion during the same month last year. In addition, profit margins on merchandise were up, “above our expectations,” said Amie Preston, chief investor relations officer.
The disappointing comparable-store sales, a key indicator of a retailer’s health, were primarily due to a 1 percent decrease in comparable-store sales at the company’s Victoria’s Secret stores, and a 9 percent drop in sales at Victoria’s Secret Direct, the chain’s online and catalog business.
L Brands officials blamed the decreases on lower clearance sales due to a shift in the timing of the semi-annual sale.
Comparable-store sales were flat at the company’s Canadian lingerie chain, La Senza.
Only the company’s personal care and home fragrance chain, Bath & Body Works, saw comparable-store sale grow, by 2 percent. The increase was driven by sales in the signature collection, home fragrance and soap and sanitizer, Preston said.
L Brands officials were cautiously optimistic about July sales, predicting low single-digit gains for comparable-store sales.
For the year to date, L Brands reported sales of $4.1 billion, an increase from $3.9 billion for the same time last year, and a comparable-store sales increase of 2 percent for the year to date.