For the first quarter L Brands reported earnings of 53 cents a share, beating the Capital IQ Consensus Estimate of 52 cents a share by 1 cent. Revenue grew 5.3% year-over-year to $2.39 billion. Analysts expected revenue of $2.38 billion for the quarter.
Looking forward to full-year 2014 L Brands narrowed its EPS guidance to between $3.00 and $3.14 a share from $3.00 to $3.20. Analysts expect earnings of $3.23 for the year.
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TheStreet Ratings team rates L BRANDS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate L BRANDS INC (LB) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and increase in stock price during the past year. However, as a counter to these strengths, we find that the company's revenue growth has not been good."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- L BRANDS INC has improved earnings per share by 18.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, L BRANDS INC increased its bottom line by earning $3.05 versus $2.54 in the prior year. This year, the market expects an improvement in earnings ($3.21 versus $3.05).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 19.1% when compared to the same quarter one year prior, going from $411.40 million to $490.00 million.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.3%. Since the same quarter one year prior, revenues slightly dropped by 1.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 45.84% is the gross profit margin for L BRANDS INC which we consider to be strong. Regardless of LB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LB's net profit margin of 12.83% compares favorably to the industry average.
- You can view the full analysis from the report here: LB Ratings Report