The Secret Behind L Brands Posting a Profit in Q2

Retail

Published: August 19, 2020 4:43 pm

L Brands Inc. (NYSE: LB) released fiscal second-quarter financial results after markets closed Wednesday. The firm said that it had $0.25 in earnings per share (EPS) and $2.32 billion in revenue, compared with consensus estimates that called for a net loss of $0.42 per share and $2.21 billion in revenue. The same period of last year had $0.24 in EPS and $2.9 billion in revenue.

Note that as a result of the COVID-19 pandemic, the company’s stores were closed during periods of time throughout the second quarter. As of the end of the second quarter, most Bath & Body Works and Victoria’s Secret stores in North America have reopened.

So here’s where it gets complicated. The company reported comparable sales of 63% for the quarter, this number includes direct sales (online), and it excludes periods of time where stores were closed for four consecutive days or more. Counting this way, Bath & Body Works saw comparable sales increase 123% and Victoria’s Secret comparable sales increased 28%.

Now excluding direct sales, but still following the four consecutive day closure rule, L Brands had comparable sales growth of 33%. Bath & Body Works comparable sales increased by 87% and Victoria’s Secret comparable sales decreased by 10%.

In terms of segment sales:

Victoria’s Secret had net sales of $977.5 million, consisting of in-store sales of $363.6 million and direct sales of $613.9 million.
Bath & Body Works had net sales of $1.20 billion, with in-store sales of $678.1 million and direct sales of $518.6 million.

The company did not provide guidance for the coming quarter or full year, citing COVID-19 uncertainty. However, analysts are calling for a net loss of $0.15 per share and $2.46 billion in revenue for the fiscal third quarter. Also there are consensus estimates of $0.12 in EPS and $10.81 billion for the fiscal full year.

Shares of L Brands closed Wednesday at $28.47, in a 52-week range of $8.00 to $29.14. The consensus analyst price target is $23.20. Following the announcement, the stock was initially up about 4% at $29.55 in the after-hours session.

Travel Cards Are Getting Too Good To Ignore (sponsored)

Credit card companies are pulling out all the stops, with the issuers are offering insane travel rewards and perks.

We’re talking huge sign-up bonuses, points on every purchase, and benefits like lounge access, travel credits, and free hotel nights. For travelers, these rewards can add up to thousands of dollars in flights, upgrades, and luxury experiences every year.

It’s like getting paid to travel — and it’s available to qualified borrowers who know where to look.

We’ve rounded up some of the best travel credit cards on the market. Click here to see the list. Don’t miss these offers — they won’t be this good forever.