L Brands (LB) Issues Positive Outlook For Q1

L Brands Inc. (NYSE:LB) humble beginnings can be traced back to 1963 when college dropout Leslie Wexner borrowed $5,000 from his aunt to open a store in Kingsdale shopping center located in Ohio. The company launched and sold several brands over its decades-long journey. It currently operates three brands including Bath & Body Works, Victoria’s Secret and PINK.

The Columbus, Ohio-based fashion retailer recently announced mixed financial results for the fourth quarter. L Brands reported earnings of $860 million, or $3.03 per share for the three months ended January 30, as compared to $1.88 per share in the same period, a year earlier. On an adjusted basis, its profit increased to $3.46 per share, easily beating the consensus forecast of $2.91 per share.

Revenue surged 2 percent on a year-over-year basis to $4.82 billion, missing analysts’ average estimate of $4.89 billion. Comparable sales in the quarter jumped 10 percent, mainly driven by double-digit growth at Bath & Body Works. On the other hand, comparable sales at Victoria’s Secret slipped 3 percent in the quarter.

Commenting on the quarterly performance, CEO Andrew Meslow said, “We experienced consistent strength at Bath & Body Works along with continued significant improvement in performance at Victoria’s Secret. Looking forward, we remain focused on our strategy to deliver compelling merchandise and experiences to our customers while maintaining a safe environment.”

L Brands projected profit in the range of 35 cents per share to 45 cents per share for the first quarter, significantly higher than the consensus forecast of 12 cents per share.

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The company did not offer a full-year outlook due to an uncertain operating environment, as well as its plan to separate Bath & Body Works from Victoria’s Secret by summer 2021. L Brands hasn’t revealed the exact method for the split; however, it did mention that it is reviewing all options including a spin-off and private sale of Victoria’s Secret.