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L Brands surges after topping earnings estimates

Shares Victoria’s Secret parent company L Brands were higher on Thursday after swinging to a profit in Q3. Overall sales rose 14% for the quarter, with the company posting a 56% jump in comparable sales.

Video Transcript

JULIE HYMAN: L Brands-- the shares are up 17% this morning. And this is a company that is shrinking to grow, in the words of our friend Simeon Siegel, an analyst who covers the company and has been saying for a long time it can be profitable and do better but it needs a smaller footprint. And it has a smaller footprint now. The company closed 239 Victoria's Secret stores year to date, and it was profitable in the quarter, $330 million in profit versus a year-earlier loss.

So, sort of to Myles's point here, there are ways of managing through crises. And as we like to talk about, you know, not every retailer is going to do well or poorly depending on what's happening in the broader economy.

BRIAN SOZZI: Well, Julie, I think Macy's may want to put a Bath & Body Works inside of their stores to drive some traffic because sales in the quarter for that brand, for L Brands, up 56%. And Simeon Siegel, like you mentioned, friend of the show-- he mentioned most of that gain was driven by home fragrance and body cares, 2/3 of that sales increase. Also the other third driven by soaps and hand sanitizers, so again, Bath & Body Works playing in that, Macy's not so much.

MYLES UDLAND: And you know what? That was a pre-pandemic thing, right? Lotions and candles-- that's been a working formula for L Brands for some time. And you talk about enduring trends-- it seems like that's one. You know, again, it was in place before the pandemic and certainly seems to be accelerating, since we spend more time at home, and we don't want things to smell stale, I suppose, in the home.