L Brands Posts Robust Holiday Sales and Lifts Guidance

Victoria's Secret parent L Brands says holiday sales exceed its own forecasts as it lifts fourth-quarter earnings guidance.
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Victoria's Secret, Pink and Bath & Body Works parent L Brands  (LB) - Get Report said Thursday that holiday sales exceeded its own expectations and the company raised its fourth-quarter per-share earnings guidance.

The Columbus, Ohio-based company said sales for the nine-week holiday period through Jan. 2, were $3.84 billion, while same-store sales rose 5%. At Victoria's Secret, same-store sales fell 9%. Bath & Body Works' same-store sales were up 17%.

The company said it now expects fourth-quarter earnings of between $2.70 and $2.80 a share, significantly above current FactSet consensus forecasts of $1.97. Sales are expected to add up to $4.8 billion, according to analysts pooled by FactSet. 

"We are very pleased with our holiday results, which significantly exceeded our initial expectations, driven by an increase in profitability at both Bath & Body Works and Victoria's Secret," CEO Andrew Meslow said in a statement.

L Brands swung to a third-quarter profit in November, highlighted by a 55% jump in sales of Bath & Body Works personal-hygiene products including soap and hand sanitizer that helped offset a drop in sales of Victoria's Secret clothing and lingerie.

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.

L Brands had been struggling with its Victoria's Secret brand even before the pandemic. The company last February cut a $525 million deal to sell the brand to private-equity firm Sycamore Partners, just weeks before the pandemic struck. 

The company is scheduled to report fourth-quarter earnings on Feb . 24. Shares of L Brands were up 2.53% at $44.65 in trading on Thursday. The stock has gained 142% in the past 12 months.