COLUMBUS, Ohio — L Brands Inc. rose in late trading after the company boosted the lower end of its full-year guidance as its Bath & Body Works brand continues to log double digit sales growth.
Same-store sales at Bath & Body Works rose 13 percent, a performance the company said “significantly exceeded our expectations.” Comparable sales at L Brands, including both in-store and direct-to-consumer sales, was flat last quarter, dragged down by weaker results at Victoria’s Secret.
While its beauty and skin care chain is going gangbusters, its Victoria’s Secret unit is still struggling. Same-store sales there fell 5 percent in the quarter. Still, investors may be hopeful change is afoot: The company recently said it would change the way it does its annual fashion show, suggesting it’s open to criticism after years losing market share to upstarts.
“We are clearly not satisfied and are working hard to improve performance,” L Brands said, referring to the results at Victoria’s Secret. The company called out declining comparable sales in its lingerie business, where margins were hit by over-discounting, and falling same-store sales at its youth-targeted PINK line.
As tariffs quickly race to the top of executive’s concerns, L Brands said the majority of its products for Victoria’s Secret Beauty and Bath & Body Works products are sourced in the US. Its lingerie and apparel is produced “across a well-diversified group” of countries, mostly Asian, with China representing less than 20 percent of the total. The company said it’s taking steps to mitigate its China exposure.
The shares rose as much as 15 percent in after-hours trading. They had slumped 16 percent this year through Wednesday’s close.
By Jordyn Holman, with assistance from Connor Corvino; editors: Anne Riley Moffat and Jonathan Roeder.