L Brands (LB 50.10, -4.01) is down 7.4% in pre-market after reporting disappointing sales figures for June.
The retailer reported that comparable sales declined 9.0% in June after the company guided for a decline in the mid to high single digits. One year ago, comparable sales increased 6.0% in June. As for net sales for the five weeks ended July 1, they declined 6.0% to $1.21 billion.
Looking at the brand breakdown including direct sales, June comparable sales at Victoria's Secret fell 17.0% year-over-year, which was worse than the year-to-date decline of 15.0%. The June decline included a ten-percentage point drop related to the exit from swim and apparel categories. Less-aggressive semi-annual sale pricing led to an increase in the merchandise margin rate.
June comparable sales at Bath & Body Works grew 8.0%, outpacing the year-to-date growth rate of 4.0%. A strong showing during the company's semi-annual sale underpinned the growth rate while the merchandise margin rate was unchanged year-over-year.
L Brands expects that total comparable sales in July will show a mid-single digit decline with the exit from swim and apparel pressuring the growth rate by roughly four percentage points.
Shares of L Brands have not been able to keep pace with the market so far in 2017, reflecting a difficult sales environment. Including today's pre-market drop, the stock is down 22.2% for the year, returning to levels from late May.