Parent Company of Victoria’s Secret Reports 37% Drop in Net Sales Amid Coronavirus

The parent store of Victoria’s Secret and Bath and Body Works, saw its shares fall 37% after the company reported first quarter financial results.

For the first quarter, L Brands reported net sales dropping 37% to $1.65 billion. Earnings per share adjusted was a loss of 99 cents. The retailer reported a net loss of $296.9 million, or $1.07 per share, compared with a profit of $40.3 million, or 14 cents a share, a year ago. Excluding one-time charges, it lost 99 cents per share.

L Brands’ same-store sales rose 4%, while they surged 41% at Bath & Body Works and dropped 13% at Victoria’s Secret. Total sales tumbled 46% to $821.5 million at Victoria’s Secret.

Total sales at Bath & Body Works dropped 18% to $712.7 million, though Bath & Body Works’ online business surged 85%.

Analysts expected L Brands to report an adjusted loss of 72 cents per share on revenue of $1.72 billion, according to Refinitiv estimates.

L Brands said it still remains committed to make Bath & Body Works a “pure-play public company,” with Victoria’s Secret operating as another standalone business.

The company revealed that it expects to permanently shut roughly 250 Victoria’s Secret and PINK stores across North America this year.

This marked the third straight quarterly loss and fourth consecutive drop in sales for the company, as its stores were forced shut for most of the period due to the coronavirus pandemic.

“While Bath & Body Works has been a key source of strength for L Brands over the past decade, recently it’s shown signs of peaking,” Jefferies analyst Randy Konik remarked.

L Brands is not providing a second-quarter or full-year outlook, due to Covid-19. The retailer did say that it anticipates the majority of its shops will be reopened by the end of July.

The company also announced in a separate securities filing, that current COO Charles McGuigan is stepping down.

Shares have dropped over 32% this year.

Disclaimer: We have no position in L Brands Inc. (NYSE: LB) and have not been compensated for this article.