L Brands (NYSE:LB) is a Columbus-based women’s intimate, personal care, and beauty retailer. It operates under the Victoria’s Secret, Pink, Bath & Body Works, La Senza, and Henri Bendel brands. Shares have climbed 6.7% in 2019 as of close on February 27.
The company released its fourth-quarter and full-year results for 2018 on after trading closed on February 27. Earnings per share fell to $1.94 compared to $2.33 in the prior year and operating income was $799.4 million compared to $986.6 million in Q4 2017.
Victoria’s Secret announced to Bloomberg that it planned to close 53 stores in North America in 2019. This is in response to declining sales performance. The decline of Victoria’s Secret is another illustration of the struggle retailers have faced in a changing environment. The rise of e-commerce has put pressure on retailers with large brick-and-mortar footprints.
For its 2019 outlook, L Brands projected earnings per share between $2.20 and $2.60. In 2018 the company reported earnings per share of $2.31. This means 2019 could easily see a decline in overall performance.
L Brands stock has plunged 43% year over year. Shares are down 67% over the past three years. In a pricey environment, investors may be looking for bargains, but L Brands is simply too shaky to take a gamble on in March. Its top brands will face an increasingly challenging environment heading into the next decade.
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