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Victoria’s Secret parent L Brands says holiday same-store sales rose 5%, offers upbeat profit outlook

Shoppers stand in line as they wait for a Victoria’s Secret store to open on Black Friday, at the Tysons Corner Center, in Tysons, Virginia, November 27, 2020.

Hannah McKay | Reuters

Victoria’s Secret parent L Brands said Thursday its same-store sales during the holiday period grew 5%, compared with a 3% drop a year ago, as shoppers bought more lounge wear, hand soap and candles ahead of the new year.

CEO Andrew Meslow said the company’s holiday results “significantly exceeded our initial expectations,” as efforts to cut back on promotions and sell more products at full price paid off.

The retailer, which also owns Bath & Body Works, is now calling for fourth-quarter earnings to be between $2.70 and $2.80 per share. Analysts were expecting $1.96, according to Refinitiv data.

L Brands is targeting fourth-quarter revenue of $3.84 billion. Analysts had been calling for $4.74 billion.

The company’s shares were up more than 5% in late-morning trading, having surged more than 150% over the past 12 months.

For the nine-week period ended Jan. 2, L Brands reported net sales of $3.84 billion, down 1.8% from $3.91 billion for the comparable year-ago period.

Within Victoria’s Secret, same-store sales — which track sales both online and in stores open for at least 12 months — fell 9% during the holiday period, with the metric dropping 23% at brick-and-mortar stores, due in large part to mall traffic declining during the Covid pandemic. The average price spent on an item at Victoria’s Secret was up, L Brands said.

Same-store sales for Bath & Body Works were up 17%, including a 5% gain in stores.

“Bath & Body Works continues to deliver record results, demonstrating the strength of the brand,” Meslow said in a statement.

“The turnaround at Victoria’s Secret also continues to gain momentum, driven by an improved merchandise assortment and focused execution of retail fundamentals and our profit improvement plan,” he added.

L Brands is expected to report fourth-quarter earnings on Feb. 24.

Find the full holiday results from L Brands here.

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