L Brands, owner of Victoria's Secret, forecasts smaller-than-expected sales decline, shares surge | Lifestyle.INQ

OCTOBER 27, 2022

People walk past a boarded up Victoria's Secret store near Herald Square on June 25, 2020 in New York City. (Photo by Angela Weiss / AFP)
A woman passes covered mannequins at a Victoria’s Secrets boutique amid the coronavirus disease (COVID-19) outbreak in Singapore May 27, 2020. REUTERS/Edgar Su

L Brands Inc on Tuesday forecast a smaller-than-expected drop in quarterly sales on strong demand for its Bath & Body Works hand sanitizers and other personal care products, and said it would cut 15% of its corporate staff.

Shares of the company surged 17% in extended trading after the Victoria’s Secret owner also said its cost-cutting efforts, including layoffs and inventory management, would help it save about $400 million annually.

L Brands is focusing on its high-margin Bath and Body Works division as the COVID-19 pandemic drives customers to stock up on personal care products such as hand sanitizers.

Columbus, Ohio-based L Brands estimated a 10% rise in second-quarter revenue for the brand, even as it expects total net sales to be down about 20% from a year earlier.

Analysts on average were expecting total net sales to decline about 35% to $1.9 billion, according to IBES data from Refinitiv.

“BBW is being helped by hand sanitizer while its candle sales slow. Sanitizer has been a lifesaver,” Jefferies analyst Randal Konik said.

The company projected a drop of about 40% in sales at its Victoria’s Secret unit, which it plans to run as a separate, standalone company after failing to sell a majority stake to private-equity firm Sycamore Partners.

L Brands has reopened most Bath & Body Works and Victoria’s Secret Stores in North America after the easing of coronavirus-induced lockdowns.

The company is expected to report results on Aug. 19.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

MOST VIEWED STORIES