L Brands, the parent of Victoria’s Secret, reported earnings and sales for the holiday quarter, i.e., last quarter of the financial year, to be higher than analysts’ expectations. They had earlier cut their earnings outlook for the fourth quarter.
However, sales fell to US $ 4.71 million from US $ 4.85 million a year back, as opposed to the anticipated US $ 4.69 million.
That being said, the lingerie company is responsible for most part of the losses as L Brands’ Bath & Body Works is doing well in the market.
Same store sales for Victoria’s Secret fell 10 per cent for the quarter, while Bath and Body Works’ sales surged 10 per cent, leaving the conglomerate with a sales drop of 2 per cent for the quarter and 1 per cent for the year.
The net loss reported by the company swung to US $ 192.3 million, or 70 cents per share for the quarter, as compared to earnings of US $ 540.1 million, or US $ 1.94 per share, for the same period a year ago.
The losses incurred by Victoria’s Secret due to consumers shunning the brand for its non-inclusivity, have pushed L Brands to consider taking the brand private.
Last week, L Brands announced that it would sell a 55 per cent stake in the company to private equity firm Sycamore Partners for a sum of US $ 525 million.
Furthermore, the brand is quietly shutting down stores in Canada with 8 stores already closed down as their lease expired and 2 more in the pipeline leaving a total of 28 stores in the country.
Post the deal, L Brands CEO and Chairman Les Wexner will step down from his position and the company will sharpen its focus on running Bath & Body Works to its full potential as a separate entity.
