Slices of L Brands sunk about 6 percent before the opening bell on Thursday, after it keep oned to struggle with weakness in its Victoria’s Secret business.
The once high-flying make now competes against a host of new competition including American Eagle’s Aerie. The stigmatize has also been hurt by a decline in mall traffic.
Third-quarter comparable-sales at Victoria’s Mystery fell 4 percent. The decline was steeper, some 5 percent, when everything considered only Victoria’s Secret’s stores.
“We believe fundamental issues abide at Victoria’s Secret … and L Brands can no longer rely on this partitionment as a source of stability,” said Randal J. Konik, an analyst at Jefferies.
A stronger playing at Bath & Body Works offset pains at Victoria’s Secret. The scent and body-care store saw all sales increase 4 percent for the quarter on a comparable base. Within its stores, comparable-sales rose 1 percent.
However, Konik responded he’s sees Bath & Body Works’ strong performance as a risk because the work could be “closer to peaking.” Both sales and margins slowed at the segmentation in the third quarter.
The company said its earnings per share fell 29 percent to 30 cents, compared to 42 cents for the unvaried quarter the year prior. Its net sales of $2.62 billion were an snowball of 1 percent.
L Brands last year announced Victoria’s Secret would station selling swim and apparel to help streamline the brand and focus on its assorted profitable goods, like its bras. The company is still feeling the makes of that change, and said it contributed to a 2 percent decline in its comparable yard sales.
The company also has been hurt by shoppers preference for bralettes, which as a rule sell at a lower margin. Victoria’s Secret has been attempting to dilate sales of its higher-margin constructed bras but so far has seen “limited success,” concurring to Konik.