=L Brands (LB) reported earnings on Wed 22 Feb 2017 (a/h)

L Brands hurt by Victoria's Secret 20% comp sales drop in Feb

L Brands beats by $0.13, reports revs in-line; guides Q1 EPS below consensus; guides FY18 EPS below consensus:

• Reports Q4 (Jan) earnings of $2.03 per share, $0.13 better than the Capital IQ Consensus of $1.90; revenues rose 2.1% year/year to $4.49 bln vs the $4.51 bln Capital IQ Consensus.
  • Comparable sales for the fourth quarter ended Jan. 28, 2017, were flat. For the fourth quarter, the exit of the swim and apparel categories had a negative impact of 2 percentage points and 4 percentage points to total company and Victoria's Secret comparable sales, respectively.
• Co issues downside guidance for Q1, sees EPS of $0.20-0.25 vs. $0.49 Capital IQ Consensus Estimate.
• Co issues downside guidance for FY18, sees EPS of $3.05-3.35 vs. $3.69 Capital IQ Consensus Estimate.
• The 2017 earnings per share forecast includes negative impacts related to the exit of the swim and apparel categories at Victoria's Secret, continued investment in China and investment in real estate at Victoria's Secret and Bath & Body Works.
• The company expects to report a mid-to-high-teens decrease in February comparable sales, below expectations for a mid-single digit decrease, reflecting a decline of about 20 percent at Victoria's Secret and a mid-single digit decline at Bath & Body Works. The exit of swim and apparel at Victoria's Secret is negatively impacting total company comparable sales by about 6 percentage points.