L Brands Inc. raised its full-year guidance after a healthy increase in first-quarter profits but disappointed investors with a second-quarter outlook that fell short of analysts’ earlier expectations.
In the three months ended May 2, the Columbus, Ohio-based operator of Victoria’s Secret and Bath & Body Works registered net income of $250.5 million, or 84 cents a diluted share, 59.6 percent above the $157 million, or 53 cents, earned in the 2014 quarter. Excluding a gain on the sale of its remaining interest in a third-party sourcing operation, earnings per share was 61 cents, 1 cent below the consensus estimate of analysts.
Revenues, reported when the company shared its April sales results earlier this month, was $2.51 billion, 5 percent above the $2.39 billion reported a year ago.
Gross margin improved to 42 percent of sales from 41.1 percent in the prior year quarter.
While the company increased its full-year guidance for adjusted earnings to a range of between $3.50 and $3.70 a diluted share, from a range of $3.45 to $3.65 previously, its newly issued second-quarter guidance of between 60 and 65 cents fell below the 69-cent EPS figure analysts had expected.
The second-quarter projections are predicated on expectations of low-single-digit comparable-store sales and a gross margin above the 39 percent registered in last year’s period.
Sales at Victoria’s Secret stores rose 8.1 percent in the quarter, to $1.35 billion, while the direct operation, which has eliminated much of the non-intimate apparel in its assortment, weathered a sales decline of 5.6 percent to end the quarter at $338.3 million. Comparable-store sales rose 5 percent during the quarter.
The company has scheduled a conference call Thursday at 9:15 a.m. to discuss the results and guidance.