L Brands logged a minor uptick in sales for the third quarter, but it may take some time for profits to recover from a year of declines.
The Victoria’s Secret operator said net sales totaled $2.61 billion for the quarter ended Oct. 29, a 1 percent increase over $2.58 billion in net sales a year ago. But net income came in at $86 million, a 29 percent drop from $121.6 million last year. Total comparable-store sales fell by 1 percent.
Earnings per share also fell 29 percent to 30 cents, which is in line with the company’s most recent guidance.
The company said its exit from swim and apparel categories, which occurred well over a year ago, had a “negative impact of about 2 percentage points to both total company and Victoria’s Secret comparable sales.”
Victoria’s Secret sales alone fell 3.2 percent during the quarter to $1.24 billion. L Brands also operates Bath & Body Works, La Senza and Henri Bendel.
Looking ahead to the fourth quarter, L Brands is expecting things to pick up significantly and projected earnings between $1.95 and $2.10 per share.
The company did not offer further comment, but executives will discuss the results with financial analysts on Thursday.
Some color on the quarter may alleviate concerns of Wall Street, which sent shares of the company down 4.4 percent in after-hours trading to $47.30.
Shares of the company fell in August to a five-year low of $37.55 when the company reported an 8 percent decline in comp sales for the second quarter and a 45 percent drop in net income to $138.9 million.
L Brands has been talking about a turnaround for a while, but founder, chairman and chief executive officer Leslie Wexner said during a recent investor conference that Victoria’s Secret is reinventing and retailing overall still “looks pretty good.”
“It’s never been better at retail and department stores are really bad and old-fashioned, fashion specialty stores are really, really bad,” he added.
Wexner went on to say that digital is a new focus for his company, which only gets “about a C-plus” from him on that front right now, but that “some really exciting things” are coming.
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