L Brands Up as Comps Surge - Analyst Blog

Shares of L Brands, Inc. LB have advanced 5% following sturdy comparable-store sales performance for April. After a 1% decline registered in March, comps of this specialty retailer of women's intimate and other apparel jumped 8% for the four-week period ended May 3, 2014.

Net sales climbed 9% to $717.6 million from $660.5 million in the prior-year period. The better-than-expected sales results prompted management to raise its earnings guidance.

Most of the retailers benefited during the month under review, as favorable weather conditions, shift in Easter holiday to Apr 20 this year, aggressive promotional strategies and improving job prospects were enough to lure consumers. Retailers such as The Cato Corp. CATO, The Gap, Inc. GPS and Zumiez, Inc. ZUMZ saw their comparable-store sales increasing 18%, 9% and 8.2%, respectively during April.

Coming to L Brands, comparable-store sales for April rose 8% both at Victoria's Secret Stores & Victoria's Secret Beauty and at Bath & Body Works & The White Barn Candle Co. Sales declined 3% at Victoria's Secret Direct.

For the 13-week period ended net sales increased 5% to $2.391 billion from $2.268 billion in the year-ago period, while comparable-store sales climbed 2%.

Management now projects first-quarter fiscal 2014 earnings between 50 cents and 52 cents a share, up from the previous range of 44 cents to 49 cents a share. The current Zacks Consensus Estimate for the quarter is 51 cents. L Brands now anticipates low-single-digit comp increase for the month of May.

L Brands, which currently carries Zacks Rank #3 (Hold), operates about 2,923 stores.

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