LB L Brands Inc

By Patrick Thomas 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 22, 2019).

L Brands Inc.'s revenue fell in its latest quarter as sales at the retailer's embattled flagship Victoria's Secret chain declined further.

The Columbus, Ohio, retailer reported net sales of $2.9 billion for its second quarter, compared with $2.98 billion a year earlier. Analysts polled by FactSet predicted $2.95 billion in revenue.

Comparable sales, which include digital and same-store sales, decreased 1% from a year earlier.

Victoria's Secret sales fell 7% to $1.61 billion from a year earlier, below the $1.67 billion analysts were expecting.

Victoria's Secret has posted four consecutive quarters of year-over-year declines in sales, as the company contends with increased competition and changing customer wants.

Overall, L Brands, which also owns Bath & Body Works, posted a profit of $37.6 million, or 14 cents a share, compared with $99 million, or 36 cents a share, a year earlier.

The company reported adjusted earnings of 24 cents a share. Analysts polled by FactSet were expecting earnings of 20 cents a share.

Sales of the company's Bath & Body Works' unit grew by 10% to $1.06 billion from a year earlier.

Shares of L Brands fell 0.4% during after-hours trading. The company reaffirmed its adjusted earnings outlook for the year of between $2.30 and $2.60 a share.

The founder and chief executive of L Brands, Leslie Wexner, has come under increased scrutiny in recent months for his ties to Jeffrey Epstein, the disgraced financier who was indicted on federal sex-trafficking charges stemming from an alleged scheme to exploit underage girls.

Mr. Epstein was Mr. Wexner's personal money manager for about two decades.

Mr. Epstein had pleaded not guilty in the case. He was found dead in a Manhattan jail cell Aug. 10, while awaiting trial. A medical examiner determined the cause of death was suicide.

Mr. Wexner said this month that his former money manager misappropriated more than $46 million of his fortune, revealing for the first time some of the financial fallout from their relationship.

L Brands' board has also hired an outside law firm to conduct a review of Mr. Epstein's role at the company.

Meanwhile, L Brands said this month that its longtime chief marketing officer, Edward Razek, will step down from his role, as the parent company of Victoria's Secret faces backlash from consumers about the unit's marketing strategy.

In recent years, Victoria's Secret's emphasis on images of supermodels and padded bras has alienated customers and invited criticism that the brand is out of touch.

Demand for the company's bras has cooled as customers have turned to brands emphasizing comfort and inclusivity.

Write to Patrick Thomas at Patrick.Thomas@wsj.com

(END) Dow Jones Newswires

August 22, 2019 02:47 ET (06:47 GMT)

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