L Brands Tumbles on Comps Decline
Shares of L Brands, Inc. (LB) tumbled 8.2% following soft comparable-store sales performance for March. After a 2% increase registered in February, comps of this specialty retailer of women’s intimate and other apparel declined 1% for the five-week period ended Apr 5, 2014. Management hinted that the shift in Easter timing this year hurt the comparable stores sales performance of this Zacks Rank #3 (Hold) stock by 2 to 3 percentage points.
However, net sales climbed 3% to $923.7 million from $894.8 million in the prior-year period.
Most of the retailers continue to grapple with cold weather in March that resulted in sluggish demand for spring merchandise. Retailers are still reeling with margin pressure due to promotional activities they undertook during a soft holiday season followed by adverse weather conditions in January and February. Moreover, a shift in Easter holiday to Apr 20 this year compared with Mar 31 last year also subdued March sales.
Retailers such as The Buckle Inc. (BKE), The Gap, Inc.(GPS) and Zumiez, Inc. (ZUMZ) saw their comparable-store sales declining 1.8%, 6% and 2.9%, respectively during March.
Coming to L Brands, comparable-store sales for March fell 1% at Victoria’s Secret Stores & Victoria’s Secret Beauty and 2% at Bath & Body Works & The White Barn Candle Co. Sales inched up 1% at Victoria’s Secret Direct.
For the nine-week period ended Apr 5, 2014 net sales increased 4% to $1.674 billion from $1.607 billion in the year-ago period, while comparable-store sales remained flat for the said period.
With Easter falling in April this year compared with March last year, management anticipates comparable-store sales for April to be up in the mid-single digits. Comps for the combined March/April period are projected to increase in the low single-digit range.
L Brands currently operates about 2,917 stores.
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