L Brands posts 5% decrease in May sales
Victoria’s Secret parent company L Brands on Thursday reported a 5% decrease in May sales to $774.3 million and 7% decrease in comparable sales for the same period. The exit of swim and apparel negatively impacted the total company and Victoria's Secret.
May marks L Brands’ fifth consecutive month of sales declines. The falling sales beg to question Victoria’s Secret supremacy in the lingerie market. A new report from Transparency Market Research found that the global lingerie market will grow to $55.83 billion by 2024, but what will Victoria’s Secret account for with consumers gravitating towards brands like Aerie?
L Brands’ restructuring is a major catalyst for the company’s sales decline. The exit of swim and apparel categories had a negative impact of 10 percentage points to the total company in May and a negative impact of 14 percentage points to Victoria’s Secret comparable sales for the same month.
In addition, L Brands reported a 6% decrease in net sales to $3.211 billion for the 17 weeks ended May 27, 2017, and a 9% decrease in comparable sales in the same period.
The decline in May sales follows the company’s 7% decrease in first quarter sales and a first quarter net income decrease to $94.1 million, or $0.33 per share, from $152.3 million, or $0.52 per share. The earnings did exceed expectations despite decreasing from the prior year.
As a result of the first quarter earnings performance, L Brands increased its 2017 earnings per share guidance from $3.05 to $3.35 to now $3.10 to $3.40. The company also expects the second quarter earnings per share to range between $0.40 and $0.45.
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