NEW YORK (TheStreet) -- L Brands (LB) shares are up 3.3% to $61.14 on Thursday after the company reported strong July sales that its expects to push second quarter earnings towards the high end of its previous guidance of between 57 cents and 62 cents per diluted share.
The Victoria's Secrets and Bath & Body Works retail operator reported that same store sales rose by 6% in July, well ahead of Thomson Reuters analyst estimates of a 1.8% gain.
L Brands is set to release its earnings report on August 21.
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 revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LB's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 5.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- L BRANDS INC has improved earnings per share by 10.4% 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 ($3.15 versus $3.05).
- 45.67% 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, the net profit margin of 6.56% trails the industry average.
- In its most recent trading session, LB has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- You can view the full analysis from the report here: LB Ratings Report