Parent of Bath & Body Works and Victoria’s Secret Tops Estimates in Q1

The parent company of Victoria’s secret and Bath & Body Works, L Brands, has posted better than expected profit in its first quarter financial report.

The company reported earnings and sales that topped analysts’ estimates, citing momentum at both of its brands and more customers paying full price for its merchandise for the strong performance.

For the quarter that ended May 1st, L Brands reported earnings per share of $1.25 adjusted. This was better than the $1.21 expected by analysts according to Refinitiv. Revenue at $3.02 billion was better than the $3.01 billion that was expected, per Refintiiv.

Net income for the quarter had rose to $276.6 million, or 97 cents per share, compared with a loss of $296.9 million, or $1.07 per share, a year earlier. Excluding one-time charges, the company earned $1.25 per share, beating the $1.21 that analysts were forecasting.

Total sales exploded over 80% to $3.02 billion from $1.65 billion a year earlier. Analysts estimates were for $3.01 billion.

Total same-store sales were up 21% year over year, compared with a 4% increase in the year-ago period.

Same-store sales at Victoria’s Secret rose 25%, compared with a 15% drop a year earlier while same-store sales at Bath & Body Works climbed 16%, compared with a 41% jump a year earlier.

Management said that customers have been “responding positively” to new merchandise at Victoria’s Secret.

“We are beginning to tell the story of our brand repositioning through our marketing,” the company said. The store had marketing for its first ever Mother’s Day campaign that featured a pregnant model.

L Brands will be spinning off its Victoria’s Secret business into its own publicly traded entity and said it wouldn’t provide a forecast for the rest of the year.

Looking ahead to Q2, L Brands is calling for adjusted earnings per share in a range of 80 cents to $1. Analysts had been looking for 76 cents per share, according to Refinitiv.

The company expects second-quarter sales will rise between 10% and 15% from 2019 levels.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.