[ACCESSWIRE]
Upcoming AWS Coverage on Ross Stores Post-Earnings Results
LONDON, UK / ACCESSWIRE / March 13, 2017 / Active Wall St. announces its post-earnings coverage on L Brands, Inc. (NYSE: LB). The Company released its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on February 22, 2017. The Columbus, Ohio-based Company reported quarterly net sales growth of 2.0% y-o-y, while, quarterly adjusted EPS fell 6% y-o-y; however it beat market consensus estimates. Register with us now for your free membership at:
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One of L Brands' competitors within the Apparel Stores space, Ross Stores, Inc. (NASDAQ: ROST), reported on February 28, 2017, its financial results for Q4 and FY16 ended January 28, 2017. AWS will be initiating a research report on Ross Stores in the coming days.
Today, AWS is promoting its earnings coverage on LB; touching on ROST. Get our free coverage by signing up to:
http://www.activewallst.com/register/
Earnings Reviewed
During Q4 FY16, L Brands' net sales improved to $4.49 billion from $4.40 billion recorded at the end of Q4 FY15. However, net sales numbers marginally lagged behind consensus market expectations of $4.50 billion. Additionally, the Company did not report any comparable sales growth during Q4 FY16, while it had recorded an 8% y-o-y growth in the year ago same period.
The fashion retailer reported net income of $631.75 million, or $2.18 diluted per share during Q4 FY16, compared to $636.02 million, or $2.15 per diluted share in the last year's comparable quarter. The Company's adjusted net income was $590.00 million, or $2.03 per diluted, in Q4 FY16, which came in below $636.02 million, or $2.15 per diluted share, in previous year's comparable quarter. However, the quarterly adjusted net income came in above market expectations of $1.90 per diluted share.
In full year FY16, the Company's net sales were $12.57 billion, up 3% from $12.15 billion reported in FY15. The Company's FY16 net income stood at $1.16 billion, or $3.98 per diluted share, compared to $1.25 billion, or $4.22 per diluted share, in FY15. Moreover, the Company's adjusted net income for FY16 came in at $1.09 billion, or $3.74 per diluted share, versus $1.18 billion, or $3.99 per diluted share, in the previous year.
Operating Metrics
For the three months ended on January 28, 2017, the Company reported gross profit of $1.94 billion compared to $2.00 billion reported in the year ago same quarter. However, the Company's gross margin as percentage of net sales fell 230 basis points during the reported quarter to 43.3%. In Q4 FY16, operating income came in at $987.55 million compared to $1.08 billion in the prior year's corresponding quarter. Furthermore, operating income as percentage of net sales fell 250 basis points to stand at 22.0% in Q4 FY16.
Segment Performance
During Q4 FY16, total sales at Victoria's Secret was $2.59 billion compared to $2.61 billion in the year ago same quarter. The segment's comparable sales declined 3% in Q4 FY16 compared to a comparable sales growth of 7% in the prior year's corresponding quarter. Furthermore, the segment's operating income during Q4 FY16 was $493.69 million, or 19.1% of segment sales, compared to $593.60 million, or 22.7% of segment sales, in the prior year's comparable quarter.
L Brands' Bath & Body Works' total sales increased to $1.62 billion in Q4 FY16 from $1.52 billion in the previous year's comparable period. The segment reported comparable sales growth of 5% during the reported quarter compared to a 7% growth in comparable sales in the year ago same period. Additionally, the segment's operating income for the reported period came in at $501.80 million, or 31.0% of segment sales, compared to $487.18 million, or 32.1% of segment sales in Q4 FY15.
Victoria's Secret and Bath & Body Works international's sales were up to $124.06 million in Q4 FY16 from $112.27 million in Q4 FY15. However, the segment operating income declined to $10.34 million, or 8.3% of segment sales, in Q4 FY16 from $28.08 million, or 25.0% of segment sales, in Q4 FY15.
Store Update
During FY16, L Brands inaugurated 23 Victoria's Secret stores and pulled shutters on 10 outlets, taking the total count of Victoria's Secret stores to 1,177 as on January 28, 2017. The Company opened 35 Bath & Body Works stores but closed 14 stores in FY16, taking the total count of Bath & Body Works stores to 1,693 stores as on January 28, 2017. Furthermore, total L-Brands store count as on January 28, 2017, was 3,074 compared to 3,005 as on January 30, 2016.
Balance Sheet
As of January 28, 2017, the Company had cash and cash equivalents balance of $1.93 billion compared to $2.55 billion, at the close of books as on January 30, 2016. Additionally, the Company recorded long-term debt of $5.70 billion as on January 28, 2017, compared to $5.71 billion as on January 30, 2016.
Outlook
In its guidance for full year FY17, L Brands projects earnings in the range of $3.05 per share to $3.35 per share. Additionally, the Company expects comparable sales to be down by low-single digits.
For Q1 FY17, the Company expects earnings in the range of $0.20 per share to $0.25 per share with comparable sales down in the range of high-single digits to low-double digits.
Stock Performance
At the close of trading session on Friday, March 10, 2017, L Brands' stock price slightly rose 0.48% to end the day at $50.30. A total volume of 3.40 million shares were exchanged during the session. The Company's shares are trading at a PE ratio of 12.63 and have a dividend yield of 4.77%. The stock currently has a market cap of $14.31 billion.
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