L Brands Inc. reported that total company sales for the month of May were $816.6 million versus last year’s $799.1 million, an increase of 2 percent.
May comparable sales, including e-commerce were flat and negatively impacted by about 2 points because of the later Memorial Day holiday. Excluding e-commerce, store comps dropped by 1 percent.
Inventories increased by 8 percent and the company said the margin rate was down significantly versus last year, although the company wouldn’t divulge that number.
Victoria’s Secret May comp sales dropped 1 percent from last year. Strength in the Pink business was offset by declines in beauty and core lingerie bras. Bath & Body Works total comps increased 3 percent and store only comps increased by 2 percent.
Net sales for the 17 weeks ending May 28 increased by 4 percent to $3.430 billion over last year’s $3.311 billion.
In May, the company transitioned into the T-shirt bra. In June, the floor will transition to the semiannual sale. L Brands expects June comps to be up low-single digits as the Sunday and Monday of the Memorial Day holiday will be counted as June.
L Brands stock is higher by 2 percent following the news as investors focused on the improving comps for June. During its last earnings announcement, L Brands detailed its plans to make organizational changes. It is planning to exit the swim and apparel businesses, as well as removing itself from the catalog promotions. The company wants to focus on its core bra business. They insisted that it wasn’t a reset year, but it definitely feels like it is.