L Brands (LB) Comps Rose 3% in March 2016; Announces Restructuring of Victoria’s Secret

L Brands, Inc. (NYSE: LB) reported net sales increased 5% to $1.027 billion for the five weeks ended April 2, 2016, compared to net sales of $981.2 million for the five weeks ended April 4, 2015. Comparable sales for the five weeks ended April 2, 2016, increased 3% and were negatively impacted by the earlier Easter this year by approximately 1 to 2 points.

The company reported net sales of $1.876 billion for the nine weeks ended April 2, 2016, an increase of 5% compared to sales of $1.787 billion for the nine weeks ended April 4, 2015. Comparable sales for the nine weeks ended April 2, 2016, increased 4%.

The company also announced changes at Victoria’s Secret designed to further focus the brand on its core merchandise categories and streamline operations. These actions include:

• Restructuring the organization into three business units: Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty. The leaders of these business units will continue to report directly to Leslie H. Wexner, chairman and CEO.
• Integrating the direct business as a primarily digital channel within the Victoria’s Secret and PINK businesses to align with how customers engage with the brands.
• Focusing resources on core merchandise categories, where the company believes the greatest growth potential exists. This will involve the elimination of certain merchandise categories.
• Evolving how the business connects with customers through more focus on loyalty programs and brand-building engagement rather than traditional catalogues and offers.
• Streamlining the organization through the elimination of approximately 200 Columbus and New York home office associates.

“Coming off a record year, now is the best time to make improvements … going from best to even better,” said Wexner. “We are making these changes to accelerate our growth and to strengthen the business for the long term by narrowing our focus and simplifying our operating model. I am certain that these changes are necessary for our industry-leading brands to reach their significant potential … nonetheless, decisions about people are the most difficult ones to make, and we are taking care to support associates who are being affected by these changes.”

Further detail and information about the ongoing impact of these actions will be provided on the company’s first quarter earnings call on May 19.

To hear further commentary provided on L Brands’ prerecorded March sales message, call 1-866-639-7583, or log onto www.LB.com for an audio replay.

You May Also Be Interested In

• IBM tumbles on soft Q1 revenue; announces HashiCorp $6.4bn acquisition
• Midday movers: Meta, IBM, Caterpillar fall; Chipotle rises
• CACI International (CACI) PT Raised to $440 at Stifel