Victoria’s Secret Owner Rises as Quarterly Sales Beat Estimates

(Bloomberg) -- L Brands Inc., the owner of Victoria’s Secret and Bath & Body Works, jumped in late trading Wednesday after reporting sales surpassed analysts estimates.

• Sales were $3.06 billion in the quarter ended Oct. 31, higher than analysts’ average estimate. E-commerce helped Victoria’s Secret post positive comparable sales -- a welcome development for the beleaguered brand.

Key Insights

• Bath & Body Works remained the star of the show for L Brands, which is retooling its business after failed sale to Sycamore Partners. Third-quarter sales at the brand surged 55% to $1.7 billion, with results strong “across all regions, store types and merchandise categories.”
• Victoria’s Secret remains challenged, but was bolstered by better web sales. Sales fell 14% to $1.35 billion, with e-commerce making up 42% of the total. The company said customers are “responding positively” to the merchandise assortment. L Brands is giving the brand an overhaul after years of poor results under founder Les Wexner.
• While the results have improved, there’s considerable uncertainty ahead. “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,” Chief Executive Officer Andrew Meslow said.

Market Reaction

• L Brands shares rose as much as 8.9% in late New York trading on Wednesday.
• See full statement here.

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