Slightly lower this afternoon, shares of L Brands (LB 41.16, -0.20 -0.48%) are reacting to this morning’s in-line September comp.
Put plainly, LB was expecting a low-single-digit September comp, including a 2 point negative impact from the company’s exit of swim and apparel. The result was mostly in-line as a 2% comp decline in September with a negative impact of 2 points (as expected) from the exit of the swim and apparel categories pretty much hit investor expectations.
In all, net sales for the five weeks ending September 30, 2017 were $981.6 million, up 1% compared to last year. As mentioned, the exit of the swim and apparel categories had a negative impact of about 2 percentage points and 3 percentage points to total company and Victoria’s Secret comparable sales, respectively. Additionally, the September hurricanes had about a 1 point negative impact to September total sales.
Management also gave expectations for October comps on a conference call this morning. The company sees October total company comps to be down low-single digits, including a negative impact from the exit of swim and apparel of about 1 point.
The initial reaction in LB stock was to the downside, but shares have strengthened into midday and now trade well off lows as the Retail (XRT 41.82, +0.23 +0.55%) sector in general gains momentum into midday.