L Brands (LB) Stock Climbs on Raised Guidance, October Sales

L Brands (LB) stock is rising in early morning trading on Tuesday, after raising 2015 third quarter earnings guidance and reporting October sales.
By Rachel Graf ,

NEW YORK (TheStreet) -- L Brands (LB) - Get Report stock is up by 2.47% to $98.83 in early morning trading on Tuesday, after the company increased its 2015 third quarter earnings guidance and reporting preliminary sales data for October. 

The parent company of brands such as Victoria's Secret and Bath and Body Works raised its earnings guidance for the quarter to a range between 51 cents per share and 53 cents per share, up from a prior range between 40 cents per share and 45 cents per share.

Last year, the company reported earnings of 44 cents per share for the 2014 third quarter.

L Brands estimates that October comparable store sales increased by 5% year over year, down from a 9% increase in September and 6% increase in August. 

The company is scheduled to report its third quarter financial results on November 18.

Separately, TheStreet Ratings team rates L BRANDS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate L BRANDS INC (LB) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.64% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • L BRANDS INC has improved earnings per share by 7.9% 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. During the past fiscal year, L BRANDS INC increased its bottom line by earning $3.49 versus $3.05 in the prior year. This year, the market expects an improvement in earnings ($3.75 versus $3.49).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 8.0% when compared to the same quarter one year prior, going from $188.00 million to $203.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 44.38% is the gross profit margin for L BRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.34% trails the industry average.
  • You can view the full analysis from the report here: LB
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