L Brands’ (NYSE: LB) latest earnings report gave a bleak look toward the future, particularly about its Victoria’s Secret division.
L Brands shares gained 66 cents, or 1.9%, in early trading Thursday to $34.71, on the heels of the earnings report, where the company, which also owns Bath & Body Works, slashed its full-year profit outlook.
For fiscal 2018, L Brands now expects earnings per share to fall within a range of $2.70 and $3.00, down from a prior range of $2.95 to $3.25.
Industry experts are afraid the company remains highly exposed to those U.S. malls suffering from weaker foot traffic, and there aren't any major square-footage cuts in the works. L Brands is meanwhile adding even more stores under the Bath & Body Works chain, including its offshoot for candles, White Barn.
L Brands, through Victoria's Secret, PINK, Bath & Body Works, La Senza and Henri Bendel, has a little more than 3,000 company-owned stores across the U.S., Canada, the United Kingdom and Greater China.
Stealing share from the age-old lingerie player are more millennial-focused brands, like American Eagle's Aerie division, Adore Me and ThirdLove, pushing trendy lace bralettes and comfortable pieces more aggressively than push-up bras.
Amazon has been making a bigger bet on the business, too, in partnering with Calvin Klein. Victoria's Secret's racy ad campaigns also don't sit well with some women in light of a new #MeToo movement.
L Brands shares have fallen more than 40%, to trade around $34.05, so far this year. The retailer has a market capitalization of roughly $9.5 billion.
