L Brands Profit Rises 13%
25 February 2016 - 11:20AM
Dow Jones News
L Brands Inc. said its fourth-quarter earnings rose 13% as it
projected 2016 earnings per share slightly below Wall Street
estimates.
The parent company of Victoria's Secret, Bath & Body Works
and La Senza expects 2016 earnings of $3.90 to $4.10 a share, while
analysts polled by Thomson Reuters project $4.18. First-quarter
guidance of 50 cents to 55 cents a share is below analysts
estimates of 65 cents.
L Brands is "very optimistic heading into 2016." The company
reiterated that currency rates and interest costs from a bond sale
will weigh on 2016 results.
The company increased its guidance for February comparable sales
growth to mid-single digits from low-single digits. Starting in
February, direct sales will be included in comparable sales
reports.
L Brands shares fell 0.5% to $82.75 in late trading.
Earlier this month, the company increased its earnings guidance
for the January quarter and said total sales rose 8% to $4.4
billion.
The company said Feb. 12 that Victoria's Secret Chief Executive
Sharen Turney would resign, with L Brands CEO Leslie Wexner taking
over the role.
Victoria's Secret has avoided many of the pitfalls faced by
other mall retailers, which have seen an erosion in traffic and
sales. Monthly same-store sales had been growing since November
2013 until a rare miss in January, when the brand's 4% decline was
partly attributed to the shift of a semiannual sale into
December.
L Brands had a strong showing during the holiday selling season,
including what it described as its "best December ever." Still,
foot traffic fell across the retail industry as shopping continues
to shift online.
In January, the National Retail Federation said factors
including warm weather and the strong dollar hurt industrywide
sales.
For the quarter ended Jan. 30, L Brands earned $636 million, or
$2.15 a share, up from $564.8 million, or $1.89 a share, a year
earlier. The company had projected $2.05 a share.
L Brands had 3,005 stores as of Jan. 30.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
February 24, 2016 19:05 ET (00:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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