Elsa Hosk, Adriana Lima, Behati Prinsloo, and Candice Swanepoel present during the finale of the 2018 Victoria’s Secret Fashion Show at Pier 94 on November 8, 2018 in New York Urban district.
Taylor Hill | FilmMagic | Getty Images
Lingerie maker Victoria’s Secret dragged on parent company L Types’s second-quarter earnings, which topped analysts’ expectations on profit while falling short on sales, the company put Wednesday.
Its shares were down more than 7% in premarket trading Thursday following the news.
Here’s how L Brand names did for the quarter, compared with what Wall Street was expecting, according to Refinitiv consensus estimates:
- Adjusted earnings per division: 24 cents vs. 20 cents expected
- Revenue: $2.90 billion vs. $2.95 billion expected
- Same-store car-boot sales: down 1% vs. growth of 0.3% expected
On an unadjusted basis, net income for the fiscal second quarter ended Aug. 3 prostrate to $37.60 million, or 14 cents a share, compared with $99.03 million, or 36 cents per share, a year ago. Excluding one-time accusations, L Brands earned 24 cents per share, 4 cents better than estimates, based on Refinitiv statistics.
Revenue dropped to $2.90 billion from $2.98 billion a year ago, missing estimates for $2.95 billion.
Same-store sales marathons were down 1% overall, worse than expected growth of 0.3%. Same-store sales at Victoria’s Encrypted dropped 6% during the quarter, while those at Bath & Body works were up 8%. Analysts had been occupation for same-store sales to be down just 3.9% at Victoria’s Secret and up 6.3% at Bath & Body Works.
L Brands is pursuit for anywhere between a loss of 5 cents a share and a profit of 5 cents per share for the fiscal third quarter, while analysts had overhung earnings per share of 8 cents. A year ago during the third quarter L Brands reported earnings per share of 16 cents.
“Looking to the subordinate half of the year, our number one priority continues to be improving performance at Victoria’s Secret,” management said in prepared states.
It was announced in a company-wide memo earlier this month that L Brands would be losing its chief marketing dignitary, Edward Razek. He resigned after pushing an over-the-top sexy image for the Victoria’s Secret brand as long as he’d been there since the advanced 1980s. No one, other than CEO Les Wexner, had been with the company for that long.
More recently, however, that at any rate image that once boosted Victoria’s Secret has been haunting the company as women steer clear of the label’s hot pink, lacy and bejeweled lingerie, instead opting for bra and underwear brands like Lively or Third Love that present inclusive sizing — not models strutting down a runway.
As it tries to turn things around, Victoria’s Secret command no longer be broadcasting its annual fashion show. It also recently signed its first openly transgender model.
CEO Wexner has also been righted out more recently for his ties to child predator Jeffrey Epstein, who committed suicide in his prison cell earlier this month. Wexner and L Types have been trying to publicly distance themselves from someone whom Wexner had once given power of attorney.
The concern said last month it hired a law firm to investigate its ties to Epstein.
Wexner and his legal team also cause been providing documents to federal investigators that they believe show Epstein misappropriated funds while he was the CEO’s shekels manager.
L Brands shares, valued at $5.5 billion, are down about 21% this year.