Victoria’s Secret is moving ahead with its plans to fly solo.
But that doesn’t mean the Angels haven’t been hurt by the pandemic. With stores closed amid the coronavirus outbreak, parent company L Brands, which also owns the Bath & Body Works brand, fell short on both top and bottom line expectations during its most recent quarter.
Net revenues for the three-month period ending May 2 slipped to $1.65 billion, down from $2.6 billion a year earlier. The dramatic decline is a result of store closures across North America — since March 17 — to help prevent the spread of the coronavirus. (The Victoria’s Secret brand also briefly shut down its e-commerce business in March.)
By brand, Victoria’s Secret’s total sales — a combination of stores and the online businesses — were $821 million, compared with $1.5 billion the same time last year, a drop of about 46 percent. With stores closed throughout April, online sales increased 30 percent but not enough to offset losses.
Even the normally lucrative Bath & Body Works business suffered during the quarter with sales slipping to $712 million, down from $870 million a year earlier. Online sales also crept up during the quarter at the candle and soap brand — comps there were up 41 percent year-over-year.
The company’s downturn in sales equaled a bottom-line loss of $296 million during the quarter, compared with gains of more than $40 million last year.
L Brands’ stock, which closed in the red 2.3 percent at $12.22 a share, is down 46.1 percent year-over-year. The company is not providing guidance for the second quarter or full year.
The company did, however, say it was moving ahead with its plans to spin off Victoria’s Secret — which includes the lingerie business, in addition to Victoria’s Secret Beauty and the Pink brand — into a private company. Bath & Body Works will continue on the public market as a stand-alone firm. The timeline for these plans have not yet been released.
In addition, L Brands said it is focused on trimming its retail fleet at the Victoria’s Secret, reducing merchandise purchases and adjusting the assortment of its lingerie and bras.
“We plan to implement additional profit improvement initiatives,” according to a company statement. “A substantial increase [is] in our focus on inventory management, sourcing cost reductions and tariff mitigations and an increase in full-price selling driven by an improved product assortment.”
The company also estimates it will close about 250 stores in North America in 2020.
Meanwhile, the retailer said it intends to “thoughtfully” reopen the remaining balance of stores during the second quarter with the majority reopened by the end of July.
“[We’re] taking steps to ensure the safety of our customers and associates and adhering to government guidelines,” the company statement said.
As of Feb. 2, L Brands owns 1,091 Victoria’s Secret stores in North America and 90 stores internationally, in addition to 1,739 Bath & Body Works stores in North America.
L Brands will host a conference call Thursday morning with analysts to discuss the results of the quarter.