A woman wearing a protective mask passes a homeless person during the coronavirus pandemic on May 12, 2020 in New York City.
John Lamparski | Getty Images
Victoria’s Secret owner L Brands posted a surprise profit and better-than-expected turnover in the last quarter, sending its shares higher in the aftermarket trading on Wednesday.
Sales fell 20% during the fiscal second quarter ending Aug. 1 with stores closing due to the pandemic, but they were not as bad as analysts feared by their division of soaps and odors.
The news sent the company’s shares up more than 4% in trading hours after closing the day by about 1%.
With the exception of one-time levies, it earned 25 cents per share, up a penny compared to a year ago and better than the 42 cents loss expected by analysts.
L Brands generated $ 2.32 billion in revenue, down from $ 2.9 billion at the same time last year, but better than an expected $ 2.21 billion, according to Refinitiv data.
On an unadjusted basis, it swung to a net loss of $ 49.6 million, or 18 cents per share, in the quarter, compared to a profit of $ 37.6 million, or 14 cents a share, a year ago.
At the Bath & Body Works brand, sales grew 13% in the US and Canada to $ 1.2 billion, allowing consumers to stock up on hand sanitizers and scented soaps to keep clean during the coronavirus crisis.
Within its Victoria’s Secret lingerie division, sales fell 39% in the US and Canada to $ 977.5 million.
Sales from the same store for Bath & Body Works climbed by an eye-popping 123%, while they went up 28% at Victoria’s Secret. Overall, sales of the same store jumped 63%, which was above the expectation of an 18% decline.
The company said it offers no prospects for the rest of the year due to the uncertainty surrounding the Covid-19 crisis.
However, it cautioned that it could get some bumps in the road, especially during the all-important holiday shopping season.
“As you know, the majority of our sales and profit for the year comes in the fourth quarter,” management said in transcribed comments. “Given the traffic constraints imposed by social distance protocols in stores and capacity constraints in our direct channel distribution centers, we have a very cautious view of our ability to manage our typical holiday volumes, which are about three times greater per week than the average week in the second quarter is historic. ”
The company said it was testing ways to spread its typical holiday sales “over a broader period of time, and to pull some volume out of the fourth quarter and into the third.”
L Brands is still planning to separate its company Bath & Body Works from Victoria’s Secret.
Last month, the company announced that it would cut about 15% of its business life, eliminating roughly 850 jobs, as part of its efforts to cut annual expenses by about $ 400 million.
L Brands ended the second quarter with $ 2.6 billion in cash on its balance sheet
The stock of L Brands has increased by about 57% this year. The company has a market cap of $ 7.9 billion.
Here is the full earnings version.
CORRECTION: An earlier version of this story caused the sales growth of the same store in Victoria’s Secret to be incorrect. Sales were up 28%.
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