L Brands, Inc. LB reported better-than-expected comparable-store sales (comps) for the month of November. Comps for the four-week period ended Nov 28, 2015 improved 7% year over year subsequent to the 5% growth in October. Net sales for the month under review increased 8% to $1.169 billion from $1.078 billion in the prior-year period. Ever since the company reported improved comps results on Dec 3, 2015, its shares have increased 3.5%.
L Brands reported comps growth of 6% at Victoria’s Secret stores and 7% at Bath & Body Works, while direct sales at Victoria’s Secret increased 12%.
For the 43-week period ended Nov 28, 2015, net sales grew 5% to $8.928 billion from $8.464 billion in the prior-year comparable period, while comps rose 5% for the same time frame.
The Zacks Rank #3 (Hold) company operates about 3,003 stores worldwide. It commands a market-leading position in the lingerie, personal care and beauty segments. We believe that L Brands’ innovative merchandise and exclusive assortments make it popular among consumers and sets it apart from its peers. The company, with its operational efficiencies as well as new and wide selection of merchandise, remains well positioned to capitalize on the same.
During third-quarter earnings conference call, management raised its fiscal 2015 earnings projection. Management now envisions earnings in the band of $1.85–$1.95 per share for the fourth quarter and between $3.69 and $3.79 for fiscal 2015, up from $3.58–$3.73 predicted earlier. The guidance for the fourth quarter and fiscal year includes an adverse foreign exchange impact of about 5 cents per share and 12 cents per share, respectively. The fourth quarter also includes incremental interest expense of approximately 4 cents per share.
L Brands expects comps growth in the low-single digit during the final quarter, while for the fiscal year the same is expected to increase in low to mid-single digit.
Apart from L Brands, other retailers also posted their comps data for Nov 2015. While Rite Aid Corporation RAD witnessed 0.9% comps growth, retailers like Gap, Inc. GPS and Zumiez, Inc. ZUMZ recorded comps decline of 8% and 13.8%, respectively.
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