Source: Company reports

L Brands reported solid 4Q15 revenue of $4.40 billion, up 8.1% year over year and slightly above the consensus estimate of $4.37 billion. Victoria’s Secret recorded sales of $2.1 billion, up 8.6% from the year-ago quarter. Comparable store sales were up 5%. Bath & Body Works sales increased by 6.7%, to $1.3 billion, year over year. Comparable store sales were up 6%. Victoria’s Secret and Bath & Body Works International sales grew by 6.4%, to $112 million. Overall, L Brands recorded comparable store sales growth of 6% for the quarter, beating the consensus estimate of 5%.

2015 RESULTS

For 2015, L Brands reported that total sales increased by 6%, to $12.2 billion. Victoria’s Secret net sales were flat at $7.7 billion. Bath & Body Works sales were up 7.1%, to $3.6 billion. Victoria’s Secret and Bath & Body Works International led growth, with sales increasing by 14.7%, to $385 million. Overall, comparable store sales for L Brands increased by 5%. Diluted EPS was $4.22, up by 20.6%, compared to $3.50 in 2014.

GUIDANCE

L Brands expects 1Q16 EPS of $0.50–$0.55, short of the $0.65 consensus estimate. For the first quarter, the consensus estimate calls for comps to rise by 3.1%, with Victoria’s Secret comps increasing by 3.0% and Bath & Body Works comps increasing by 3.7%. Revenue is expected to increase by 6% year over year, to $2.67 billion, according to the consensus estimate. The company expects to report a mid-single-digit increase in February comparable store sales, versus analysts’ expectations of a low-single-digit increase, reflecting a mid-single-digit increase at both Victoria’s Secret and Bath & Body Works. Starting in February, direct sales will be included in comparable sales reports. For 2016, L Brands expects EPS of $3.90–$4.10, short of the consensus estimate of $4.19. Forecasts include negative impacts related to foreign currency exchange rates.