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Earnings Highlights and Review: L Brands' Top- and Bottom-Line Numbers Outperformed Expectations

Research Desk Line-up: Urban Outfitters Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 6, 2017 / Pro-Trader Daily publishes post-earnings coverage on L Brands, Inc. (NYSE: LB) following the Company's release of its first quarter fiscal 2017 financial results on May 17, 2017. The specialty retailer of women's intimate and other apparel increased its outlook for fiscal year 2017 earnings. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:


Get more of our free earnings reports coverage from other constituents of the Apparel Stores industry. Pro-TD has currently selected Urban Outfitters, Inc. (NASDAQ: URBN) for due-diligence and potential coverage as the Company announced on May 16, 2017, its financial results for Q1 which ended on April 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Urban Outfitters when we publish it.

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Earnings Reviewed

L Brands reported net sales of $2.44 billion for the first quarter ended April 29, 2017, a decrease of 7% compared to sales of $2.61 billion for Q1 2016. The Company's revenue number exceeded analysts' consensus estimates of $2.40 billion

During Q1 2017, L Brands' comparable sales fell 9%. For the reported quarter, the exit of the swim and apparel categories had a negative impact of 6% and 9% to total Company and Victoria's Secret comparable sales, respectively.

For Q1 2017, L Brands' operating income was $209.2 million compared to $323.4 million in Q1 2016, while the Company's net income was $94.1 million compared to $152.3 million in the prior year's same quarter. L Brands' earnings per share were $0.33 for Q1 2017 compared to $0.52 for Q1 2016.

The Company's Q1 2016 results included pre-tax charges of $34.5 million, or $0.07 per share, related to actions at Victoria's Secret, including severance charges, fabric cancellations, and the write-off of catalogue paper. Excluding these charges, the Company's adjusted earnings for the reported quarter were $0.33 per share compared to $0.59 in the prior year's comparable quarter, and adjusted net income totaled $94.1 million compared to $173.7 million in the year ago same period. L Brands' earnings surpassed Wall Street's expectations of $0.29 per share.

Segment Results

During Q1 2017, L Brands' sales at Victoria's Secret Stores declined 10% to $1.25 billion compared to sales of $1.38 billion in Q1 2016, while Victoria's Secret Direct sales totaled $286.5 million compared to $359.7 million in the prior year's corresponding quarter. Total Victoria's Secret sales for Q1 2017 were $1.53 billion compared to $1.74 billion in Q1 2016. The segment's comparable sales declined 14% on a y-o-y basis.

For Q1 2017, L Brands' Bath & Body Works' segment recorded sales of $678 million compared to sales of $660.2 million in Q1 2016. The segment's comparable sales grew 2% in the reported quarter versus growth of 6% in the prior year's same quarter.

Store Update

During Q1 2017, L Brands opened two Victoria's Secret outlet, while it closed one store in the reported quarter. As of April 29, 2017, the segment's operating stores count totaled 1,178 stores. For the reported quarter, L Brands opened seven Bath & Body Works stores, while it shut down three outlets, taking the overall total for the segment to 1,697 stores.

Cash Matters

As of April 29, 2017, L Brands had cash and cash equivalents of $1.55 billion compared to $1.27 billion as on April 30, 2016. The Company's long-term debt decreased to $5.70 billion at the end of the reported quarter compared to $5.72 billion at the end of the year ago same quarter.

Cash Flow

On May 19, 2017, L Brands announced the declaration of its regular quarterly dividend of $0.60 per share payable on June 16, 2017, to shareholders of record at the close of business on June 02, 2017. This is the Company's 170th consecutive quarterly dividend.

2017 Outlook

L Brands increased its guidance for 2017 full-year earnings per share to $3.10 to $3.40 from the previously announced number of $3.05 to $3.35. For Q2 2017, the Company is projecting earnings in the range of $0.40 and $0.45.

Stock Performance

On Monday, June 05, 2017, L Brands' stock closed the trading session at $51.87, slipping 1.11% from its previous closing price of $52.45. A total volume of 2.70 million shares have exchanged hands. In the last month and previous three months, shares of the Company have advanced 4.92% and 0.84%, respectively. The stock is trading at a PE ratio of 13.71 and has a dividend yield of 4.63%. The stock currently has a market cap of $14.88 billion.

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SOURCE: Pro-Trader Daily