Post Earnings Coverage as L Brands Tops Market Expectation with 24 Percent Growth in Income

LONDON, UK / ACCESSWIRE / August 22, 2016 / Active Wall St. announces its post-earnings coverage on L Brands, Inc. (NYSE: LB). The company reported its second quarter earnings on August 17, 2016. The owner of Victoria's Secret and Bath & Body Works raised its view for the year as revenue topped Wall Street's expectations, with the Company reporting growth in comparable same store sales. Register with us now for your free membership at: http://www.activewallst.com/register/.

Today, AWS is promoting its earnings coverage on LB, touching on stocks of Macy's Inc. (NYSE: M) and Target Corp. (NYSE: TGT). Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended on July 30, 2016, L Brands reported earnings of $252.4 million, or $0.87 per share, higher by 24% from $202.5 million, or $0.68 per share in the year earlier quarter. The latest quarter's result includes a pre-tax gain of $108.3 million ($0.24 per share) related to a cash distribution from Easton Town Center, offset by a pre-tax charge of $35.8 million ($0.08 per share) related to the early extinguishment of the company's July 2017 notes. The retailer's second quarter adjusted earnings rose to $0.70 per share from $0.68 per share in the year-ago period. The Columbus, Ohio headquartered company's that total sales increased 5% to $2.89 billion from $2.77 billion in the comparable period. Analysts predicted revenue of $2.86 billion.

Comps Grows

For Q2 FY16, L Brands reported a 3% rise in comparable store sale (comps), driven by improvement in Victoria Secret sales and continued strength in the bath and body business. Sales in Victoria's Secret division were up 3% to $1.87 billion in Q2 FY16, with comps up 2%.

Bath & Body Works sales were up $801.40 million from $748 million in the year ago quarter, with comps growing by 5%.

L Brands' comps growth matched analysts' expectations; however it was below the 4% growth reported in comps in the year ago period. L Brands' growth in comps is an exception in the retail industry as a number of retailors reported declining comps, attributed to general economic downturn, consumers moving to online shopping, and cutthroat competition.

On August 11, 2016, Macy's Inc. reported that its comps declined 2%, the company also announced that it would close around 100 stores, or 15% of its location. On August 17, 2016, Target Corp. reported that its comps declined for the first time in more than two years.

Guidance

L Brands updated its outlook for the fiscal year 2016. The company is forecasting adjusted earnings to be in the range of $3.70 to $3.85 per share, up from an earlier range of $3.60 to $3.80 and versus the $3.73 analysts have anticipated. For Q3 FY16, L Brands predicts adjusted earnings of $0.40 to $0.45 per-share, below analysts' estimation of $0.47 per share.

Stock Performance

L Brands' stock declined marginally by 0.14, finishing the trading session, at $77.76, %, on August 19, 2016. A total of 3.4 million shares were traded for the day. The company's share price has gained 10.76% in the past one month and 24.47% in the last three months.

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