L Brands profit up on soap, sanitizers
Consumers stocking up on soap and hand sanitizer sent sales and profit soaring at Bath & Body Works and its parent, L Brands, this summer and early fall.
Improvements at L Brands' struggling Victoria's Secret chain helped too.
The result: A 15% surge in the retailer's stock that pushed shares of L Brands to their highest level in more than two years.
L Brands on Wednesday reported profit of $330.6 million, or $1.17 per share, for the three months that ended Oct. 31, compared with a loss of $252 million, or 91 cents per share for the same period of 2019.
When accounting for one-time charges, L Brands posted a profit of $1.13 per share compared with 2 cents per share a year ago.
The results easily topped Wall Street estimates of a 10-cent-per-share profit and shares jumped more than 15% in after-hours trading, continuing a strong run since March.
“We significantly exceeded our internal expectations, driven by record results at Bath & Body Works, as well as an improved performance at Victoria's Secret,” the company said in the earnings statement.
Revenue jumped 14% in the quarter to $3.1 billion.
Bath & Body Works led the way, with sales at stores opened at least a year jumping 38% during the quarter and overall sales up 55% from a year ago to $1.7 billion. Online sales jumped 132%.
“Third-quarter sales were strong across all regions, store types and merchandise categories. ... Two-thirds of our dollar growth came from our home fragrance and body care categories, with one-third of the growth coming from soaps and sanitizers,” L Brands said.
Bath & Body Works sales made up 56% of all of L Brands sales for the quarter.
Meanwhile, sales fell 14% at Victoria's Secret and comparable store sales dropped 10%, but the segment's adjusted operating income rose to $114.6 million compared with a $70 million loss in the year ago-quarter.
Like other retailers, L Brands has had to adjust to the pandemic. Many of the company's stores were closed for a period during the spring.
L Brands said it is negotiating with landlords to get rent waivers, relief and deferrals.
L Brands shares have been on a roll since March, after bottoming below $10 during the market selloff.
On Wednesday, shares were trading above $38. mawilliams@dispatch.com @Bizmarkwilliams