L Brands Marks Sixth Straight Month of Sales Declines
The Victoria’s Secret operator is still pointing to a lack of swim and apparel for the declines.
L Brands Inc. can count June as its sixth straight month of sales declines.
The Victoria’s Secret and Bath & Body Works operator saw net sales in June fall to $1.2 billion, a 6 percent drop from the $1.3 billion in sales tallied the same time a year ago. Comparable store sales fell by 9 percent.
Amie Preston, the company’s chief investor relations officer said during a recorded message to investors that the comp declines were “at the low end of expectations.”
L Brands cited its decision to pull out swimwear and most apparel from Victoria’s Secret as having a negative impact on consolidated sales equal to 7 percent.
Comparable store sales at Victoria’s Secret were down 17 percent in June, 10 percent of which can be attributed to the lack of swim and apparel, according to L Brands. During May, comp sales for the lingerie fell 14 percent.
The company has continually pointed last year’s decision to exit swim and most apparel as an explanation of what’s now a six month string of sales declines.
Preston said July will see Victoria’s Secret “delivering new fashion” with its T-shirt bra and the Wear Everywhere bra for sister line Pink, but did not speculate on whether that would lead to an uptick in sales.
As for the year up to July 2, L Brands has recorded 4.4 billion in total net sales, down 6 percent from a year ago. Comp sales are also down 9 percent.
L Brands’ first quarter results painted a starker picture of its apparent struggles, with net income down to $94.1 million, a 38 percent drop from 2016.
Executive vice president and chief financial officer Stuart Burgdoerfer said at the time that L Brands is still planning to hit 10 percent growth in operating income for the year, namely by “focusing on the things we can control,” like inventory management and a disciplined approach to expenses and capital spending.
L Brands isn’t the only retailer struggling.
The Buckle Inc., a national teen specialty retailer focused on denim, saw comp sales for the five weeks ended July 1 fall by 5.8 percent and net sales drop by 5.9 percent to $73.6 million, compared to last year. Net sales for the year so far are also down to $347.3 million, a decline of 10.8 percent.
Fast-fashion retailer The Cato Corp., which operates stores under Cato, Versona and It’s Fashion banners, saw net sales for the five weeks ended July 1 fall by 15 percent to $74.7 million. Same store sales fell by 16 percent.
Cato’s chairman, president and chief executive officer John Cato said things aren’t looking up for the second quarter, and expects results for the period and the full year “to be significantly below last year.”