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L Brands (LB) Reports Sharp Decline in February Comps
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L Brands, Inc. witnessed a decline in comparable sales for the third consecutive month as the company reported February sales numbers. This specialty retailer of women’s intimate and other apparel, beauty and personal care products posted 13% decline in comps for the four-week ended Feb 27 after registering a decline of 4% and 1% in January and December, respectively. Moreover, net sales for February slumped 10% to $765.5 billion.
L Brands’ comps declined 16% at Victoria’s Secret and 4% at Bath & Body Works. The company’s February sales were primarily hurt due to the exit from the swim and apparel categories, which had a 6 percentage points and 8 percentage points negative impact on overall company and Victoria’s Secret comparable sales, respectively.
The company stated that merchandise margin rate fell considerably in February, in comparison with the prior year, chiefly owing to flaring promotional expenses.
This Columbus, OH-based company expects the fiscal first-quarter earnings in the range of 20–25 cents, which is well below the year-ago earnings of 59 cents per share. L Brands now expects comparable sales in the first quarter to decline in the range of high-single digit to low-double digits year over year.
Moreover, management projects earnings in the band of $3.05–$3.35 per share for fiscal 2017, sharply down from the fiscal 2016 earnings of $3.74 and fiscal 2015 earnings of $3.99. The earnings projection includes adverse impact of the company’s decision to exit the swimwear category at Victoria’s Secret, continued investment in China as well as investment in real estate at Victoria’s Secret and Bath & Body Works.
For fiscal 2017, it envisions comparable sales to be down by low-single digit. Further, the company anticipates total sales growth to be about 3 to 4 points higher than comps on account of square footage growth and due to a 53rd week.
The company’s shares have declined 28.4% in the past six months, underperforming the Zacks categorized Retail-Apparel/Shoe industry, which has decreased 13.1%.
Kate Spade & Company delivered an average positive earnings surprise of 14.6% in the trailing four quarters and has a long-term earnings growth rate of 28.3%.
Zumiez delivered an average positive earnings surprise of 30.9% in the trailing four quarters and has a long-term earnings growth rate of 15%.
Genesco delivered an average positive earnings surprise of 31.4% in the trailing four quarters and has a long-term earnings growth rate of 9.5%.
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L Brands (LB) Reports Sharp Decline in February Comps
L Brands, Inc. witnessed a decline in comparable sales for the third consecutive month as the company reported February sales numbers. This specialty retailer of women’s intimate and other apparel, beauty and personal care products posted 13% decline in comps for the four-week ended Feb 27 after registering a decline of 4% and 1% in January and December, respectively. Moreover, net sales for February slumped 10% to $765.5 billion.
L Brands’ comps declined 16% at Victoria’s Secret and 4% at Bath & Body Works. The company’s February sales were primarily hurt due to the exit from the swim and apparel categories, which had a 6 percentage points and 8 percentage points negative impact on overall company and Victoria’s Secret comparable sales, respectively.
The company stated that merchandise margin rate fell considerably in February, in comparison with the prior year, chiefly owing to flaring promotional expenses.
This Columbus, OH-based company expects the fiscal first-quarter earnings in the range of 20–25 cents, which is well below the year-ago earnings of 59 cents per share. L Brands now expects comparable sales in the first quarter to decline in the range of high-single digit to low-double digits year over year.
Moreover, management projects earnings in the band of $3.05–$3.35 per share for fiscal 2017, sharply down from the fiscal 2016 earnings of $3.74 and fiscal 2015 earnings of $3.99. The earnings projection includes adverse impact of the company’s decision to exit the swimwear category at Victoria’s Secret, continued investment in China as well as investment in real estate at Victoria’s Secret and Bath & Body Works.
For fiscal 2017, it envisions comparable sales to be down by low-single digit. Further, the company anticipates total sales growth to be about 3 to 4 points higher than comps on account of square footage growth and due to a 53rd week.
The company’s shares have declined 28.4% in the past six months, underperforming the Zacks categorized Retail-Apparel/Shoe industry, which has decreased 13.1%.
Zacks Rank
Currently, L Brands carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the retail sector include Kate Spade & Company , Zumiez, Inc. (ZUMZ - Free Report) and Genesco Inc. (GCO - Free Report) , all these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kate Spade & Company delivered an average positive earnings surprise of 14.6% in the trailing four quarters and has a long-term earnings growth rate of 28.3%.
Zumiez delivered an average positive earnings surprise of 30.9% in the trailing four quarters and has a long-term earnings growth rate of 15%.
Genesco delivered an average positive earnings surprise of 31.4% in the trailing four quarters and has a long-term earnings growth rate of 9.5%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>