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Victoria’s Secret might be ‘broken’ as L Brands slashes its outlook

Victoria’s Affair is looking broken, according to one analyst, following the earnings report by tha lingerie retailer’s mother company, L Brands.

Shares of L Brands, which also owns Bath & Substance Works, initially sold off Thursday after the company slashed its full-year profit view. However, as the retailer discussed during a call with the financial community its arranges to improve performance, the stock recouped its losses and climbed more than 3 percent.

“The unfetter … sheds light on just how promotional the biz was, with merchandise periphery down significantly,” Jefferies analyst Randal Konik said in a note to patients. He added that L Brands’ “rock” in Bath & Body Works “more than the past few years is starting to destabilize.”

For fiscal 2018, L Brands now expects earnings per piece to fall within a range of $2.70 and $3, down from a whilom before estimate of $2.95 to $3.25.

Industry experts increasingly fear the company is greatly exposed in U.S. malls suffering from weaker foot traffic and has no designs for major cuts in square footage. L Brands, in fact, is adding constant more stores under the Bath & Body Works chain, counting its offshoot for candles, White Barn.

L Brands, through Victoria’s Esoteric, Pink, Bath & Body Works, La Senza and Henri Bendel, has a scant more than 3,000 company-owned stores spread across the U.S., Canada, the Opinion Kingdom and Greater China.

“The dark store environment, the conspicuous sexuality of the proposition, and the brash marketing are increasingly out of step with what modern consumers hunger,” GlobalData Retail managing director Neil Saunders said approximately Victoria’s Secret.

The age-old lingerie player is facing increased meet from more millennial-focused brands like American Eagle’s Aerie section, Adore Me and ThirdLove. Those brands offer trendy lace bralettes and smug pieces more aggressively than push-up bras. Amazon has been colouring a bigger bet on the business, too, in partnering with Calvin Klein. Victoria’s Confidential matter’s racy ad campaigns also don’t sit well with some women in come out of the #MeToo movement.

“Niche players may only have a small allot compared to Victoria’s Secret, but their innovative approaches mean they are nibbling away at its supermarket share,” Saunders said.

L Brands shares have fallen multifarious than 40 percent so far this year. The retailer has a market capitalization of ineptly $9.5 billion.

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