[ACCESSWIRE]
Upcoming AWS Coverage on Ross Stores Post-Earnings Results
LONDON, UK / ACCESSWIRE / November 28, 2016 / Active Wall St. announces its post-earnings coverage on L Brands (NYSE: LB). The company released its financial results for the third quarter fiscal 2016 (Q3 FY16) on November 16, 2016. The Columbus, Ohio-based company reported quarterly net sales growth of 4.0% y-o-y. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of L Brands's competitors within the Apparel Stores space, Ross Stores, Inc. (NASDAQ: ROST), reported on November 17, 2016, earnings per share for Q3 ended October 29, 2016. 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/registration-3/?symbol=LB
http://www.activewallst.com/registration-3/?symbol=ROST
Earnings Reviewed
During Q3 FY16, L Brands' net sales improved to $2.58 billion from $2.48 billion recorded at the end of Q3 FY15. Net sales numbers for the reported quarter came in almost in-line with the consensus market expectations of $2.58 billion. Additionally, comparable sales growth during Q3 FY16 was 2% versus 7% in the year ago period.
The fashion retailer reported net income of $121.64 million, or $0.42 diluted per share, during Q3 FY16, which was lower than $164.03 million, or $0.55 per share, recorded in the year ago quarter. However, the quarterly net income marginally came in above market expectations of $0.40 per diluted share.
Operating Metrics
For the three months ended on September 30, 2016, the company reported gross profit of $1.03 billion, which was similar to the gross profit number reported in the year ago quarter. However, the company's gross margin as percentage of net sales fell 190 basis points during the quarter to 39.7%. In the reported quarter, operating income came in at $28.58 million compared to $338.76 million in the prior year's same quarter. Furthermore, operating income as percentage of net sales was down 270 basis points to 11.0% in Q3 FY16.
Segment Performance
During Q3 FY16, total sales at Victoria's Secret improved 1.1% to $1.58 billion from $1.57 billion in the year ago comparable quarter. Victoria's Secret Stores sales inched up 0.3% y-o-y to $1.29 million, while Victoria's Secret Direct sales rose 4.5% y-o-y to $298.2 million in the reported quarter. However, the segment's comparable sales declined 1% in Q3 FY16 compared to a comparable sales growth of 6% in the prior year's same quarter.
L Brands' Bath & Body Works' total sales grew 9.2% y-o-y to $770.2 million in Q3 FY16. The segment reported comparable store sale growth of 5% in Q3 FY16 compared to a 6% growth in comparable sales in the year ago same period. Additionally, Victoria's Secret and Bath & Body Works international sales were up 11.7% y-o-y to $103.7 million, and other revenues improved 6.2% to $123.0 million in Q3 FY16.
Store Update
During the first nine months of FY16, L Brands inaugurated 19 Victoria's Secret stores and pulled shutters on seven outlets, taking the total count of Victoria's Secret stores to 1,176 as on October 29, 2016. In the first three quarter of FY16, the company opened 27 Bath & Body Works stores but closed five stores, taking the total count of Bath & Body Works stores to 1,694 stores as on October 29, 2016. Additionally, one PINK UK store was opened, resulting in a total of three of its kind stores. Furthermore, the company owned stores count as on October 29, 2016 was 3,073.
As of Oct 29, 2016, total franchised stores count were 764, comprising 381 stores of Victoria's Secret Beauty & Accessories, 21 stores of Victoria's Secret, five Pink brand stores, 150 Bath & Body Works stores, and 207 La Senza stores.
Balance Sheet
As of October 29, 2016, the company had cash and cash equivalents balance of $654.05 million compared to $1.31 billion, at the close of books as on October 31, 2015. Additionally, the company recorded long-term debt of $5.70 billion as on October 29, 2016, compared to $5.71 billion as on October 31, 2015.
Dividend
In a separate press release on November 03, 20116, L Brands declared regular quarterly dividend of $0.60 per share payable on December 02, 2016, to shareholders of record at the close of business on November 18, 2016. This dividend will mark the company's 168th consecutive quarterly dividend.
Outlook
In its guidance for Q4 FY16, L Brands expects earnings in the range of $1.85 per share to $2.00 per share with comparable sales in the range of flat to up low-single digits year-over-year during Q4 FY16. For full year FY16, the company projects earnings in the range of $3.56 per share to 3.71 per share. Additionally, the company expects comparable sales to increase by low-single digits.
Stock Performance
At the close of trading session on November 25, 2016, L Brands' stock price was marginally down 0.37% to end the day at $71.81. A total volume of 1.50 million shares were exchanged during the session. The company's share price has gained 8.48% in the past six months. The stock currently has a market cap of $20.54 billion. The company's shares are trading at a PE ratio of 18.20 and have a dividend yield of 3.34%.
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