L Brands Rises as Comparable Sales Surpass Expectations - Analyst Blog

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Shares of L Brands, Inc. ( LB ) moved up 6.8% following comparable-store sales results for July, the four weeks ended Aug 2, 2014, that surpassed analysts' expectations. Comps of this specialty retailer of women's intimate and other apparel climbed 6%. The rate of growth sharply accelerated from 2% attained in June.

Net sales for July increased 8% to $735.3 million from $678.4 million in the prior-year period.

Most of the retailers benefited during the month under review due to increasing consumer confidence, improving job prospects and aggressive promotional strategies. Retailers such as Rite Aid Corporation ( RAD ), The Cato Corporation ( CATO ) and Walgreen Co. ( WAG ) saw their comparable-store sales increasing 4.6%, 4% and 5.2% respectively, during July.   

Coming to L Brands, comparable-store sales for July rose 5% at Victoria's Secret Stores & Victoria's Secret Beauty and 7% at Bath & Body Works & The White Barn Candle Co. Sales rose 1% at Victoria's Secret Direct.

For the 26-week period ended Aug 2, net sales increased 6% to $5,067 million from $4,784 million in the year-ago period, while comparable-store sales grew 3%.

For the second-quarter of fiscal 2014, L Brands posted comparable-store sales growth of 3%, while net sales jumped 6% to $2,675 million from $2,516 million in the year-ago quarter.

Sales at Victoria's Secret Stores increased 6.4% to $1,363 million, whereas Victoria's Secret Direct sales fell 0.3% to $382.4 million. Total Victoria's Secret sales grew 4.8% to $1,745.4 million, while comps increased 3%. Bath & Body Works total sales jumped 5.5% to $704.7 million, with a 3% rise in comps. Victoria's Secret and Bath & Body Works International surged 71.3% to $79.3 million. Other revenue increased 6.9% to $145.9 million.

L Brands, which currently carries a Zacks Rank #3 (Hold) and operates about 2,942 company-owned stores, now projects a low single-digit comps increase for the month of August.

The company now anticipates second-quarter earnings to come in at the upper end of its earlier provided guidance of 57 cents to 62 cents a share, when its reports of Aug 20. The current Zacks Consensus Estimate for the quarter is 62 cents.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Stocks

Referenced Stocks: RAD , WAG , LB , CATO

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