Why Investors Are Stripping L Brands Down

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L Brands Inc. (NYSE: LB) saw its shares take a dip on Thursday after the company gave an update on its most recent month of sales. Unfortunately, results did not live up to expectations and investors stripped the stock down.

According to the update, the firm had net sales that fell by 6% to $1.213 billion for the five weeks ended July 1, compared to net sales of $1.296 billion for the comparable period last year. Comparable sales for the five weeks ended July 1, 2017, decreased 9%. For June, the exit of the swim and apparel categories had a negative impact of about seven percentage points and 10 percentage points to total company and Victoria’s Secret comparable sales, respectively.

In terms of the 22 weeks ended July 1, 2017, or the year to date number, L Brands reported net sales of $4.424 billion for a decrease of 6% from the net sales of $4.727 billion for the same period last year. Comparable sales year to date decreased 9%. For this period, the exit of the swim and apparel categories had a negative impact of about seven percentage points and 10 percentage points to total company and Victoria’s Secret comparable sales, respectively.

Apart from Victoria’s Secret, L Brand’s also owns Bath & Body Works, which posted $1.21 billion in net sales, a decline of 6% from last year’s $1.296 billion. Comparable sales fell during this period as well, roughly 9%.

Looking ahead to the firm’s next quarter, Thomson Reuters has consensus estimates of $0.44 in earnings per share (EPS) and $2.78 billion in revenue. The same period of last year reportedly had EPS of $0.70 and $2.89 billion in revenue.

Excluding Thursday’s move, the stock is down nearly 18% year to date. Over the past 52 weeks, the stock is down just over 19%.

Although, if we look at the performance over the past quarter, the stock is actually up 24%, but this has more to do with the brief but massive sell-off in early April.

Shares of L Brands were last seen down about 12% at $47.65 on Thursday, with a consensus analyst price target of $53.73 and a 52-week range of $43.04 to $79.67.