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L Brands' October Comparable Sales Grow on Innovations

Shares of L Brands, Inc. (LB) witnessed a marginal growth of roughly 1%, following comparable-store sales (comps) results for the four weeks ended Nov 1, 2014, faring better than analysts' expectations.

As announced on Nov 6, comps of this specialty retailer of women’s intimate and other apparel, beauty and personal care products climbed 3%.

Net sales for October increased 3% to $700 million from $680.5 million in the prior-year period. We believe that the company’s operational efficiencies, together with its new and innovative collections augmented sales.

Retailers benefited during the month under review from increasing consumer confidence and improving job prospects. Retailers such as Zumiez, Inc. (ZUMZ) and Rite Aid Corporation (RAD) saw their comps rising 3.1% and 5.5%, respectively, during September.

L Brands, which competes with Hanesbrands Inc. (HBI), saw its comps for October remaining flat at Victoria’s Secret Stores & Victoria’s Secret Beauty, and rising 5% at Bath & Body Works & The White Barn Candle Co. However, sales declined 7% at Victoria’s Secret Direct.

For the 13-week period, net sales increased 7% to $2,319 million from $2,171 million in the year-ago period, while comps grew 5%. Net sales for the 39-week period grew 6% to $7,385 million from $6,955 million in the year-ago period, while comps advanced 3%.

L Brands, which currently carries a Zacks Rank #2 (Buy) and operates about 2,971 company-owned stores, is slated to release its third-quarter fiscal 2014 results on Nov 19. Earlier this month, the company raised its earnings guidance to a band of 38–40 cents a share, up from its previous forecast of 26–31 cents, reflecting year-over-year growth of 23–29%. Analysts polled by Zacks, project earnings to come in at 40 cents.

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