When a mall-based apparel retailer reports good news, it is news. Enter L Brands (LB 46.75, +3.14, +7.2%), the operator of brands such as Victoria's Secret and Bath & Body Works, which reported good sales news for the month of October and even better news for its third quarter outlook after Wednesday's close.
The retailer's stock has responded in kind as investors have been heartened by the positive combination.
Specifically, L Brands reported net sales of $794.1 million for the four-weeks ended October 28, up 5% year-over-year. The sales boost was aided by a 2% increase in comparable sales, which exceeded the company's guidance for a low single-digit decline.
The exit of the swim and apparel categories had a negative impact, the company said, of about 1 percentage point and 2 percentage points to total company and Victoria's Secret comparable sales, respectively.
For the 13-week period ended October 28, net sales for L Brands increased 1% to $2.618 billion. Comparable sales, meanwhile, decreased 1% with the exit of the swim and apparel categories negatively impacting both total and Victoria's Secret comparable sales by about 2 percentage points. Comparable sales were in-line with the company's guidance, which called for them to be flat to down low single digits.
L Brands helped soothe some of the lingering sales concerns with an indication that it expects third quarter earnings per share to be at the high end of its previous guidance of $0.25 to $0.30. At the same time, L Brands reiterated that it continues to expect full-year 2017 earnings per share to be between $3.00 and $3.20.
It hasn't been an easy road for L Brands this year, which has been branded as one of the struggling mall-based apparel retailers. Entering today's session, shares of LB were down 34% in 2017.
Today's gain is helping to cushion that blow a bit, but whether it's the start of a U-turn for LB rests in part on how L Brands fares during the all-important holiday selling season.