L Brands Q3 Profit Jumps 25.3% on Higher Sales

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victoria's secretColumbus, OH—Limited Brands Inc. reported Wednesday afternoon that its third quarter profit rose 25.3% beating estimates as sales increased. But the parent of Victoria’s Secret gave a more modest forecast.

For the quarter ended Nov. 2, L Brands (formerly Limited Brands) posted net income of $92 million or 31 cents a share compared with $73.4 million, or 25 cents a share, in the same quarter last year.

Net sales rose 6% to $2.17 billion while total comparable store sales rose 3%.

Analysts’ average estimate anticipated earnings of 28 cents a share on revenue of $2.17 billion.

By retail division, sales at Victoria’s Secret Stores and Victoria’s Secret Beauty increased 5% to $1,058.5 million; comp sales were up 4%. Victoria’s Secret Direct sales fell 1% to $268.9 million. Total Victoria’s Secret sales grew 4% to $1,327.4 million. Bath & Body Works, The White Barn Candle Co.’s total sales increased 5% to $566.6 million, with a 3% increase in comps. Comps at La Senza rose 3%, but sales fell 9% to $75.1 million.

Gross profit for the quarter grew 3% to $856.7 million, whereas gross margin contracted 130 basis points to 39.5%. Operating income advanced 7% to $211 million, while operating margin expanded 10 basis points to 9.7%.

Looking forward, L Brands forecasted earnings of $1.67 to $1.82 a share. Analysts’ consensus expects $1.83 a share  (The fourth quarter projection includes incremental interest expense of about 2 cents a share related to the $500 million notes issued in October, which was not included in the company’s previous forecast.)

L Brands raised its full year earnings outlook to $3.07 to $3.22 a share from its prior outlook of $3.06 and $3.21 a share. Analysts’ forecast $3.19 a share.


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