L Brands Raises Profit Outlook Despite Soft January Sales
05 February 2016 - 1:30AM
Dow Jones News
L Brands Inc. on Thursday raised its profit outlook for the
recently ended fourth quarter, though the parent of retailers such
as Victoria's Secret reported a surprise decline in a key sales
metric in January.
Shares fell 2.3% to $93 a share in premarket trading.
L Brands, which also owns mall stalwart Bath & Body Works,
said it now expects earnings of $2.05 a share, above its earlier
guidance for earnings of $1.85 to $1.95. That would also top the $2
a share analysts polled by Thomson Reuters are forecasting for the
quarter.
L Brands also said it has boosted its annual dividend by 20% to
$2.40 and announced a $2 special dividend, payable March 4. The
company added that it has authorized a $500 million share-buyback
program.
But the company said comparable sales, which exclude newly
opened and closed stores, fell 2% in January, while analysts had
expected a 2.4% increase, according to Consensus Metrix. L Brands
cited the shift of the Victoria's Secret semiannual sale into
December for the decline.
Victoria's Secret sales fell 4% in January, while analysts had
expected 3.3% growth. Bath & Body Works sales were up 2%,
better than the 1.1% growth analysts had forecast.
Despite the softer-than-expected month, L Brands reported
overall sales for the fourth quarter, which ended Jan. 30, that
topped expectations. L Brands said net sales rose to $4.4 billion
from $4.07 billion a year earlier. Analysts had forecast $4.37
billion in sales.
Comparable sales rose 6% for the period.
L Brands had a strong showing during the holiday selling season,
including what it described as its "best December ever," as
consumers didn't pull back as much as feared. Still, foot traffic
to stores fell across the retail industry as shopping continues to
shift online. L Brands will report its fourth-quarter earnings and
give guidance for 2016 on Feb. 25. Meanwhile, L Brands said it
expects 2016 profit to be hurt by $1 billion in debt issuance last
year and pressure from foreign exchange.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 04, 2016 09:15 ET (14:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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