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Can L Brands (LB) Stock Repurchase Program Revive the Stock?
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L Brands, Inc.’s , which has been grappling with multiple headwinds is leaving no stone unturned to win back investors’ confidence, evident from the strategic endeavors undertaken and also the recent announcement of the share buyback program. The company’s board of directors authorized a fresh $250 million share repurchase program, including the remaining $10.3 million from the previous $250 million authorization.
Management is trying all means to bring the company back on growth trajectory. L Brands continues to revamp business by improving store experience, localizing assortments and enhancing direct business. The company is focusing on cost containment, inventory management, merchandise, and speed-to-market initiatives to regain momentumWell only time will tell whether these steps would help the stocentum, which has tanked 44.7% in a year, wider than the industry’s decline of 28.3%.
What’s Troubling the Stock?
The company continues to face short-term challenges due to its decision to exit the swimwear category, which according to analysts have failed to generate desired results. The effect of the short-term challenges is clearly visible in thIS Zacks Rank #5 (Strong Sell) company’s sale performance that have declined year over year and also missed the Zacks Consensus Estimate in the past few quarters. Further, the company’s comparable store sales have also been witnessing a sharp decline in the past few quarters. (Read: L Brands Dismal Comparable Sales Run Persists in August)
Investor sentiment was further hurt after the company trimmed fiscal 2017 guidance, when it reported second-quarter fiscal 2017 results. Management projects earnings in the band of $3.00-$3.20 per share for fiscal 2017, down from the previous guidance of $3.10-$3.40. This was also below the fiscal 2016 earnings of $3.74 and fiscal 2015 earnings of $3.99. Moreover, the company anticipates the fiscal third-quarter earnings in the range of 25-30 cents, compared with prior-year quarter earnings of 42 cents.
Gross margin, an important financial metric, which gives an indication about the company’s health, has shown constant deceleration in the past few quarters. Further, management anticipates gross margin to deteriorate year over year during the third quarter as well as fiscal 2017.
Costco Wholesale has an impressive long-term earnings growth rate of 9.5%.
Tilly's delivered an average positive earnings surprise of 83.7% in the trailing four quarters.
Burlington Stores pulled off an average positive earnings surprise of 17.7% in the trailing three quarters and has a long-term earnings growth rate of 16.2%.
4 Promising Stock Picks to Keep an Eye On
With news stories about computer hacking and identity theft becoming increasingly commonplace, the cybersecurity industry looks like a promising investment opportunity. But which stocks should you buy? Zacks just released Cybersecurity: An Investor’s Guide to Locking Down Profits to help answer this question.
This new Special Report gives you the information you need to make well-informed investment choices in this space. More importantly, it also highlights 4 cybersecurity picks with strong profit potential.
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Can L Brands (LB) Stock Repurchase Program Revive the Stock?
L Brands, Inc.’s , which has been grappling with multiple headwinds is leaving no stone unturned to win back investors’ confidence, evident from the strategic endeavors undertaken and also the recent announcement of the share buyback program. The company’s board of directors authorized a fresh $250 million share repurchase program, including the remaining $10.3 million from the previous $250 million authorization.
Management is trying all means to bring the company back on growth trajectory. L Brands continues to revamp business by improving store experience, localizing assortments and enhancing direct business. The company is focusing on cost containment, inventory management, merchandise, and speed-to-market initiatives to regain momentumWell only time will tell whether these steps would help the stocentum, which has tanked 44.7% in a year, wider than the industry’s decline of 28.3%.
What’s Troubling the Stock?
The company continues to face short-term challenges due to its decision to exit the swimwear category, which according to analysts have failed to generate desired results. The effect of the short-term challenges is clearly visible in thIS Zacks Rank #5 (Strong Sell) company’s sale performance that have declined year over year and also missed the Zacks Consensus Estimate in the past few quarters. Further, the company’s comparable store sales have also been witnessing a sharp decline in the past few quarters. (Read: L Brands Dismal Comparable Sales Run Persists in August)
Investor sentiment was further hurt after the company trimmed fiscal 2017 guidance, when it reported second-quarter fiscal 2017 results. Management projects earnings in the band of $3.00-$3.20 per share for fiscal 2017, down from the previous guidance of $3.10-$3.40. This was also below the fiscal 2016 earnings of $3.74 and fiscal 2015 earnings of $3.99. Moreover, the company anticipates the fiscal third-quarter earnings in the range of 25-30 cents, compared with prior-year quarter earnings of 42 cents.
Gross margin, an important financial metric, which gives an indication about the company’s health, has shown constant deceleration in the past few quarters. Further, management anticipates gross margin to deteriorate year over year during the third quarter as well as fiscal 2017.
3 Retail Stocks Hogging the Limelight
Top-ranked stocks, which warrant a look in the retail sector includes, Costco Wholesale Corporation (COST - Free Report) , Tilly's, Inc. (TLYS - Free Report) and Burlington Stores, Inc. (BURL - 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.
Costco Wholesale has an impressive long-term earnings growth rate of 9.5%.
Tilly's delivered an average positive earnings surprise of 83.7% in the trailing four quarters.
Burlington Stores pulled off an average positive earnings surprise of 17.7% in the trailing three quarters and has a long-term earnings growth rate of 16.2%.
4 Promising Stock Picks to Keep an Eye On
With news stories about computer hacking and identity theft becoming increasingly commonplace, the cybersecurity industry looks like a promising investment opportunity. But which stocks should you buy? Zacks just released Cybersecurity: An Investor’s Guide to Locking Down Profits to help answer this question.
This new Special Report gives you the information you need to make well-informed investment choices in this space. More importantly, it also highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>