Will L Brands (LB) Stock be Helped by May Sales Results?

NEW YORK (TheStreet) -- L Brands Inc. (LB) reported its sales results for May 2015, and posted a year-over-year increase in net sales and comparable same store sales, which exceeded analysts' expectations for the period.

For the four weeks ended May 30, 2015 L Brands said its net sales grew by 5% to $799.1 million, compared to the $763.6 million in net sales the company reported for the same month last year.

Comparable store sales for May 2015 jumped by 5% when compared to May 2014.

Analysts polled by Thomson Reuters had forecast for a 2.8% increase in same-store-sales.

L Brands is a Columbus OH.,-based specialty retail company that focuses on the sale of women's intimates and other apparel, as well as beauty and personal care products.

L Brands is the parent company of the Victoria's Secret and Bath & Body Works stores.

Shares of L Brands closed at $86.16 on Wednesday afternoon.

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 some important positives, 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 impressive record of earnings per share growth, compelling growth in net income, revenue growth, solid stock price performance and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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

  • L BRANDS INC reported significant earnings per share improvement 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 ($3.73 versus $3.49).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 59.5% when compared to the same quarter one year prior, rising from $157.00 million to $250.47 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 5.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 58.49% and other important driving factors, this stock has surged by 55.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • 42.04% 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 9.97% compares favorably to the industry average.
  • You can view the full analysis from the report here: LB Ratings Report

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