Victoria’s Secret June sales disappoint analysts

L Brands shares closed down more than 12 percent after the retailer’s Victoria’s Secret chain reported disappointing June sales.

The Columbus- based retailer reported Victoria’s Secret comparable- store sales — a key indicator of a retailer’s health — were down by 1 percent, a surprise to analysts who had expected a 2.9 percent increase.

Store- only comparable store sales were even worse, dropping by 6 percent, indicating that the chain’s online sales continue to prop up weak brick- and- mortar store sales.

Overall sales for L Brands, however, increased to $ 1.3 billion during the month from $ 1.2 billion for the same time a year ago.

And comparable store sales increased by 3 percent, slightly better than Wall Street expectations of a 2.9 percent increase.

Despite that, “it was not a good month” for L Brands, said Ken Perkins, president of research firm Retail Metrics.

Victoria’s Secret’s popular semi- annual sale “had a soft start with negative traffic levels,” said Amie Preston, chief investor relations officer.

“In response, we extended the sale time period versus last year by about two weeks and reduced pricing to drive traffic and clear inventory, which resulted in merchandise ( profit) margin rates down significantly to last year.”

Victoria’s Secret has seen “massive traffic declines, zero pricing power and market share losses mounting,” analyst Randal Konik of Jefferies & Co. said in a note to investors. “It’s game over.”

The bright spot was Bath & Body Works, whose June comparable- store sales increased by a whopping 10 percent, far better than even Wall Street’s optimistic prediction of a 3.8 percent rise.

That chain’s strong performance was driven by its semi- annual sale.

Profit margins for the month were down, mainly as a result of a shift in the semi- annual sale into June, even as discounts were the same as last year.