L Brands’ sales fell 4.07 per cent over the holiday period. Comparable sales for the period fell three per cent. Victoria’s Secret continued to be the main source of the parent company’s financial woes in November and December, posting a 12 per cent decrease in comparable sales over the holiday period. These plummeting revenues were offset somewhat by an increase of four per cent at Bath & Body Works. Year to date net sales fell 2.76 per cent compared to the prior-year period, while comparable sales for the 11-month period decreased two per cent.
Bath & Body Works was left to pick up the slack with a five per cent increase in comparable sales against a nine per cent decrease at Victoria’s Secret. The iconic lingerie brand, which has failed to adapt to changing consumer attitudes, has continued to prove a problem for L Brands this fiscal year. In the light of its disappointing performance during the holiday period, L Brands has revised down its outlook for fourth-quarter earnings per share.
L Brands has been focused on diversification of its supply chain over the past five years. The company has been in negotiations with its Chinese suppliers to take costs out of the production chain to offset the increases, but that also means leaving a little bit on the table so vendors don’t end up seeing their businesses fail.