L Brands has had a tough start to the year and Wall Street isn’t feeling forgiving.
Shares of the retail operator fell about 6 percent to $49.91 in the first hour of trading after revealing a 2 percent decline in April sales, which is $719.6 million, compared with $737.5 million a year ago. Comparable-store sales fell by 5 percent and would have fallen by even more was it not for the later Easter holiday, which positively impacted sales by 3 percent.
The company again cited last year’s decision to drop swim and most apparel offerings from Victoria’s Secret, L Brands’ biggest operation, as at least a partial cause for the decline.
Comp sales at Victoria’s Secret alone declined by 12 percent during the month. A company spokesperson said during a recorded call for investors that while the brand’s Pink business was strong, that was “offset by a decline in the lingerie business.”
Sales for the quarter ended April 29 also dropped by 7 percent, falling to $2.4 billion from 2.6 billion last year. The quarterly decline is not surprising considering L Brands has decreasing net sales every month so far this year.
Heading into May, the company is expecting more of the same, with comp sales down “in the mid to high-single digits,” and a lack of swim and apparel still affecting that number.
However, L Brands did up its earnings guidance, saying a lower-than-expected tax rate should allow for earnings of 30 cents per share, compared to the 20 cents to 25 cents per share expected last month.
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