L Brands Up As Comps Surge - Analyst Blog

Shares of L Brands, Inc. LB advanced 1.7% following comparable-store sales results for May, the four weeks ended May 31, 2014, that bettered analysts' expectations. Comps of this specialty retailer of women's intimate and other apparel moved up 3%.

However, it is to be noted that the rate of growth decelerated from 8% attained in April that benefited from the Easter holiday. Net sales for the month of May climbed 4% to $763.6 million from $737 million in the prior-year period.

Most of the retailers benefited during the month under review, as favorable weather conditions, aggressive promotional strategies and improving job prospects were enough to lure consumers. Retailers struggled with dampened sales in the first three months of the year as the harsh weather locked consumers indoor. April sales improved and the upswing continued in May too. Retailers such as Costco Wholesale Corporation COST, The Gap, Inc. GPS and Zumiez, Inc. ZUMZ saw their comparable-store sales increasing 6%, 1% and 3.6%, respectively during May.

Coming to L Brands, comparable-store sales for May rose 2% at Victoria's Secret Stores & Victoria's Secret Beauty and 5% at Bath & Body Works & The White Barn Candle Co. Sales declined 10% at Victoria's Secret Direct.

For the 17-week period ended May 31, 2014, net sales increased 5% to $3.155 billion from $3.005 billion in the year-ago period, while comparable-store sales climbed 2%.

L Brands, which currently carries a Zacks Rank #3 (Hold) and operates about 2,928 stores, now anticipates low-single-digit comp increase for the month of June.