L Brands’ fourth quarter results top expectations

L Brands became the latest retailer to post better-thanexpected fourth-quarter results, reporting earnings per share that beat Wall Street predictions by 5 cents. However, its first-quarter earnings predictions were lower than expected, and shares fell in after-hours trading.

The Columbus-based retailer reported sales of $4.8 billion for the fourth quarter and earnings of $664.1 million or $2.33 per share, up from $4.5 billion in sales, with earnings of $632 million or $2.18 per share for the same quarter a year before.

Comparable-store sales, a key indicator of a retailer’s health, increased 2 percent.

By brand, sales at Victoria’s Secret rose to $2.7 billion from $2.6 billion the same quarter a year ago. Comparable-store sales at the brand dropped by 1 percent, better than the 3 percent drop a year ago during the same quarter.

At Bath & Body Works, sales rose to $1.8 billion from $1.6 billion during the same quarter a year ago. Comparable-store sales at the brand rose by 6 percent, better than the 5 percent increase a year ago during the same quarter.

For the year, sales rose to $12.6 billion, up from $12.57 billion the year before. However, net income dropped to $983 million, or $3.42 per share, from the year-ago $1.2 billion or $3.98 per share.

L Brands said the exit of the swim and apparel categories had a negative impact of about 3 percentage points and 5 percentage points to total company and Victoria’s Secret comparable-sales, respectively.

For the coming year, the retailer expects full-year earnings per share to be between $2.95 and $3.25, including earnings per share between 15 and 20 cents per share in the first quarter. The forecast reflects the benefit of a lower tax rate because of tax reform legislation and an incremental investment in wages and benefits, principally for hourly associates, of approximately $100 million.

Analysts polled by FactSet expected first-quarter earnings of 31 cents a share.

The report was released after the close of the stock market. L Brands shares were down more than 8 percent in after-hours trading.