L Brands Inc. late Wednesday reported a robust pickup in second-quarter earnings that just beat Wall Street’s expectations.
During the three months ended Aug. 3, the company, formerly known as Limited Brands Inc., registered a 24.5 percent increase in net income to $178.9 million, or 61 cents a diluted share, from $143.6 million, or 49 cents, in the year-ago period. On average, analysts had expected earnings per share of 60 cents.
Revenues gained 4.9 percent to $2.52 billion from $2.4 billion in the 2012 quarter while same-store sales increased 2 percent. The consensus among analysts was for revenues of $2.51 billion.
The operator of Victoria’s Secret and Bath & Body Works said it expected third-quarter earnings of between 23 and 28 cents a share, below Wall Street’s consensus estimate of 29 cents, and full-year EPS of $3.06 to $3.21, up from previous guidance of $2.95 to $3.15. The high range of the revised outlook for the year matched the previous consensus estimate.
Stifel Nicolaus analyst Richard Jaffe pointed out that the newly issued third-quarter guidance includes a negative impact of between 2 and 3 cents a share to cover calendar timing shifts at Victoria’s Secret and costs for system implementation at La Senza. He reiterated his “hold” rating on the stock, noting that the business has continued to grow at a “steady and deliberate pace, limiting risk and laying the foundation for consistent future growth.” However, with the stock recently trading at 17 times Stifel’s estimate for the year, “much of the good news is reflected in the current stock price.”
Shares Wednesday closed at $59.85, down 51 cents or 0.8 percent, but declined in after-hours trading an additional 3.3 percent, to $57.85.
The company will hold a conference call this morning to discuss the results and outlook.