Shares of L Brands (LB) - Get Report bubbled higher on Thursday after the owner of Bath & Body Works and Victoria’s Secret swung to a third-quarter profit, highlighted by a 55% jump in sales of personal-hygiene products including soap and hand sanitizer that helped offset a drop in sales of clothing and lingerie.
L Brands was up more than 13% on Thursday after the Columbus, Ohio-based company posted earnings of $330.6 million, or $1.17 a share, vs. a loss of $252 million, or 91 cents a share, in the comparable year-ago quarter.
Analysts polled by FactSet had been expecting earnings of 12 cents a share.
Sales were $3.06 billion in the quarter ended Oct. 31, well above analysts' forecasts of $2.7 billion, driven in large part by surging e-commerce sales at both brands, L Brands said.
Personal-hygiene products such as hand sanitizers and soaps boosted Bath & Body Works sales to $1.7 billion. Victoria's Secret, meanwhile, had higher sales in sleepwear and loungewear thanks to pandemic-driven demand for "nesting" apparel, though total sales fell 14% to $1.35 billion.
“We are cautious about our ability to exceed last year’s fourth-quarter sales and earnings results, given anticipated constraints on store traffic, online fulfillment and shipping capacity, as well as other uncertainties related to the Covid pandemic,” CEO Andrew Meslow said in a statement.
L Brands had been struggling with its Victoria's Secret brand even before the pandemic struck. The company in February cut a $525 million deal to sell the brand to private-equity firm Sycamore Partners, just weeks before the pandemic struck.
Sycamore in April sued to halt the deal, claiming store closings and failure to pay rents were violations of the agreement. L Brands called off the deal in early May; longtime L Brands leader Les Wexner stepped down as CEO following the failed deal.
In August, L Brands said it would close 250 Victoria's Secret stores and cut 15% of its corporate jobs as it prepares to separate the two brands.
Shares of L Brands were up 13.83% at $38.35 in trading on Thursday. The stock has nearly tripled since touching $10.35 following the failed Sycamore deal in May.