Victoria’s Secret, notorious lingerie retailer, is finding out the hard way that sex isn’t selling, at least not this summer. This comes after the company reported its June sales were not up to par. As a result, its parent company L Brands Inc. (NYSE: LB), is watching its shares take a dive on Thursday.
L Brands operates two segments: Victoria’s Secret and Bath & Body Works. There was not a slowdown at Bath & Body Works, as this company’s sales were in line and comps remained strong, around 10% for the month, compared to last year.
However, Victoria’s secret had a soft showing with comparable sales down about 1% for the month of June. This was in part due to the Victoria’s Secret semiannual sale that ultimately had a “soft start with negative traffic level.”
As a result, management tried to combat this by extending the sale period by about two weeks compared to last year. The retailer also reduced pricing to drive traffic and clear inventory, which ultimately resulted in merchandise margin rates falling significantly.
24/7 Wall St. has taken a look at the June big picture numbers for L Brands separately.
Shares of L Brands were last seen down about 11% at $32.81, with a consensus price target of $39.17 and a 52-week trading range of $30.70 to $63.10.