L Brands tops analysts’ estimates for earnings and revenue in the fourth quarter

L Brands tops analysts’ estimates for earnings and revenue in the fourth quarter
Written by:
Michael Harris
29th February, 14:57
Updated: 11th March, 08:54
  • L Brands tops analysts’ estimates for earnings and revenue in the fourth quarter.
  • L Brands posts $4.71 billion in revenue in the fourth quarter versus $4.69 billion expected.
  • L Brands makes $1.88 of earnings per share in the fourth quarter versus $1.86 expected.

L Brands revealed its holiday quarter’s earnings report last week that came out stronger than expected. The company recently announced that its Victoria’s Secret lingerie business is likely to go private in the upcoming months.

The financial results failed to cast a strong impact on L Brands’ stock. Following weak sales during 2019’s holiday season, L brands had downwardly revised its earnings outlook for Q4. In terms of same-store sales, L Brand’s Victoria’s Secret saw a 10% decline in its sales (both online or otherwise) in the fourth quarter. The decline, however, was offset by a 10% increase in its Bath & Body segment in Q4.

L Brands’ Same-Store Sales Dropped 2% In The Holiday Quarter

All in all, the holiday quarter reported a 2% drop in the company’s same-store sales. On an annual basis, the decline in the same-store sales was capped at 1% versus a 3% increase that was noted in 2018.

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According to Refinitiv, analysts were expecting L Brands to print $4.69 billion in revenue in the recent quarter. On the earnings front, their estimate was highlighted at $1.86 per share. In its performance results last week, the company claimed to have generated a slightly higher $4.71 billion in revenue and made $1.88 of earnings per share.

L Brands’ net loss in the fourth quarter was registered at $192.3 million that was sharply lower than $540.1 million in earnings in the same quarter last year. The company’s revenue was printed at $4.85 billion in 2018’s Q4.

Sycamore Partners To Get 55% Stake In Victoria’s Secret For $525 Million

L Brands recently revealed a deal worth $525 million with Sycamore Partners that is expected to give 55% of Victoria’s Secret’s stake to the private equity firm. Once the deal is completed, Les Wexner, the current chairman and CEO of L Brands is also likely to exit from both of his roles at the company. According to L brands, completion of the transaction is expected in 2020’s second quarter.

At the time of writing, L Brands is trading at $21.66 per share in the stock market that marks an around 25% growth in 2020 so far. Its performance in the stock market in 2019, however, was reported largely downbeat with an annual loss of around 30%. The stock opened at around $26 per share in January 2019 while it closed the year significantly lower at around $18 in December. L Brands currently has a market value of $5.99 billion.  

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