L Brands’ sales slip, but less than expected
L Brands reported August sales fell, a result that was predicted, with the notable exception of Bath & Body Works, which did better than expected.
The Columbus-based retailer reported comparable-store sales — a key indicator of a retailer’s health — fell by 4 percent during the month, slightly better than Wall Street predictions of a 4.2 percent drop.
The company’s shares closed up about 0.4 percent in trading Thursday.
Sales for the month stood at $842.1 million, down from the $852.9 million during August 2016.
Once again, the company blamed the decline on the exit of the swim and apparel categories.
Those exits affected the Victoria’s Secret chain, where comparable-store sales declined by 7 percent. Analysts expected a drop of 7.1 percent.
“Growth in the (youthoriented) Pink business was more than offset by (the) negative impact of exiting swim and apparel and a decline in the lingerie business,” said Amie Preston, chief investor relations officer.
Even so, it was L Brands’ smallest monthly comparable-store decline since January, observed Ken Perkins, president of research firm Retail Metrics. “The swim and apparel exit drag lessened ... from July to August.”
Other good news at Victoria’s Secret was that profit margins were up, thanks to fewer discount and clearance items.
At Bath & Body Works, comparable-store sales increased by 4 percent, well ahead of Wall Street expectations of a 1.9 percent rise.
However, profit margins were down, due to increased discounts.
Looking ahead, L Brands expects comparable-store sales in September to decline in the low single digits.