L Brands tops earnings expectations; revenues fall short on Victoria’s Secret weakness
Victoria’s Secret parent company L Brands, Inc. reported fourth-quarter income of $860.3 million, or $3.03 per share, on Wednesday, beating the $2.91 per share forecast by Refinitiv analyst data, as cited by CNBC. The result was also a significant improvement when compared to the net loss of $192.3 million, or $0.70 per share, posted by the company in the same period in the previous year.
The group’s net sales for the fourth quarter ended January 30, 2021, totaled $4.82 billion, increasing 2% from $4.71 billion in the prior-year period, but falling short of analysts’ expectations of $4.87 billion.
As usual, the company’s Bath & Body Works brand led revenue growth, seeing sales of $2.72 billion, up 21.8% from the prior-year period. Lingerie brand Victoria’s Secret, on the other hand, continued to hinder its parent company’s progress, posting a year-over-year decline of 15.2% in its revenues, which totaled $2.10 billion.
Both brands made progress in the direct channel, with Victoria’s Secret managing a 32.7% increase in direct revenues, while Bath & Body Works posted a 74.0% rise.
“Following on our record third quarter results, the exceptional efforts and execution of our team enabled us to deliver another record performance in the fourth quarter,” said L Brands CEO Andrew Meslow in a release. “We experienced consistent strength at Bath & Body Works along with continued significant improvement in performance at Victoria’s Secret.”
Full-year net sales at the company were $11.85 billion, slipping 8.3% from $12.914 billion in the previous year. Annual earnings totaled $844.5 million, or $3.00 per share, up from a net loss of $366.4 million, or $1.33 per share.
“Looking forward, we remain focused on our strategy to deliver compelling merchandise and experiences to our customers while maintaining a safe environment,” added Meslow. “At the same time, we continue to move ahead in our plans to separate our two businesses. As a result of the collective initiatives underway, the company is well positioned to continue driving value for our shareholders.”
L Brands intends to complete the planned separation of Victoria’s Secret and Bath & Body Works into two separate, standalone companies in August 2021.
In the first quarter, L Brands expects to report earnings per share in the range of $0.35 to $0.45. Due to the upcoming separation of its businesses and the uncertainty surrounding the ongoing Covid-19 pandemic, the company has not provided full-year financial guidance for 2021.
Copyright © 2023 FashionNetwork.com All rights reserved.