Shares of L Brands, Inc. declined roughly 6% during the after-market trading session on Oct 31. The move came after this specialty retailer of women’s intimate and other apparel, beauty and personal care products provided soft comparable-store sales forecast for October and trimmed its third-quarter fiscal 2016 earnings projection.
This Columbus, OH-based company now expects October comparable-store sales to inch up 1%. However, that is below analysts’ expectations and lower than 3% growth registered in the month of September. Further, management now envisions a 2% decline in comparable-store sales at Victoria’s Secret but an increase of 6% at Bath & Body Works. L Brands had earlier projected comparable-store sales to be approximately flat year over year in the third quarter.
Apart from lower-than-expected October comparable-store sales forecast, L Brands now expects third-quarter earnings to be 40 cents a share, reflecting a year-over-year decline of approximately 27% from 55 cents delivered in the year-ago period. Management had previously projected earnings in the band of 40–45 cents a share.
The Zacks Consensus Estimate for the third quarter is currently pegged at 45 cents, which is likely to witness a downward revision in the coming days, following the company’s trimmed guidance.
L Brands’ sustained focus on cost containment, inventory management, merchandise and speed-to-market initiatives has kept it afloat in a soft consumer environment. However, the competitive retail landscape and short-term challenges such as foreign currency headwinds are likely to weigh upon the company’s performance.
L Brands, which carries a Zacks Rank #3 (Hold), is slated to release its third-quarter fiscal 2016 results on Nov 16.
Stocks to Consider
Investors interested in the retail space may consider some better-ranked stocks such as American Eagle Outfitters, Inc. (AEO - Free Report) , DSW Inc. and Boot Barn Holdings, Inc. (BOOT - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Eagle Outfitters delivered an average positive earnings surprise of 9.3% over the trailing four quarters and has a long-term earnings growth rate of 11.8%.
DSW delivered an average positive earnings surprise of 24% over the trailing four quarters and has a long-term earnings growth rate of 8.3%.
Boot Barn Holdings has a long-term earnings growth rate of 14.5%.
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Shares of L Brands, Inc. declined roughly 6% during the after-market trading session on Oct 31. The move came after this specialty retailer of women’s intimate and other apparel, beauty and personal care products provided soft comparable-store sales forecast for October and trimmed its third-quarter fiscal 2016 earnings projection.
This Columbus, OH-based company now expects October comparable-store sales to inch up 1%. However, that is below analysts’ expectations and lower than 3% growth registered in the month of September. Further, management now envisions a 2% decline in comparable-store sales at Victoria’s Secret but an increase of 6% at Bath & Body Works. L Brands had earlier projected comparable-store sales to be approximately flat year over year in the third quarter.
Apart from lower-than-expected October comparable-store sales forecast, L Brands now expects third-quarter earnings to be 40 cents a share, reflecting a year-over-year decline of approximately 27% from 55 cents delivered in the year-ago period. Management had previously projected earnings in the band of 40–45 cents a share.
The Zacks Consensus Estimate for the third quarter is currently pegged at 45 cents, which is likely to witness a downward revision in the coming days, following the company’s trimmed guidance.
L Brands’ sustained focus on cost containment, inventory management, merchandise and speed-to-market initiatives has kept it afloat in a soft consumer environment. However, the competitive retail landscape and short-term challenges such as foreign currency headwinds are likely to weigh upon the company’s performance.
L Brands, which carries a Zacks Rank #3 (Hold), is slated to release its third-quarter fiscal 2016 results on Nov 16.
Stocks to Consider
Investors interested in the retail space may consider some better-ranked stocks such as American Eagle Outfitters, Inc. (AEO - Free Report) , DSW Inc. and Boot Barn Holdings, Inc. (BOOT - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Eagle Outfitters delivered an average positive earnings surprise of 9.3% over the trailing four quarters and has a long-term earnings growth rate of 11.8%.
DSW delivered an average positive earnings surprise of 24% over the trailing four quarters and has a long-term earnings growth rate of 8.3%.
Boot Barn Holdings has a long-term earnings growth rate of 14.5%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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