L Brands saw a sharp turnaround in the first quarter of its fiscal year as a retailer keep working on the breakup of Victoria’s Secret and Bath & Body Works in separate companies.
The retailer reported earnings of 97 cents per share for the three months ending May 1, compared to a loss of $ 1.07 per share for the same period in 2020, when the retailer’s stores were closed for about the half of the quarter due to the pandemic.
The retailer also took a charge a year ago related to the closure of more than 200 Victoria’s Secret stores, or around 20% of its company-owned stores.
Sales totaled $ 3 billion for the quarter, nearly double the same period in 2020, as consumers continue to source soap and sanitizer from Bath & Body Works and sales stabilize at Victoria’s Secret.
The retailer said it benefited from federal stimulus programs that put more money in consumers’ pockets. L Brands estimated that the stimulus programs increased Bath & Body Works sales by $ 50 million and Victoria’s Secret by $ 75 million in the quarter.
The company posted a profit of $ 276.6 million for the period, compared to a loss of $ 296.9 million in the first quarter of 2020.
By discounting a one-time charge for prepayment of certain debts, L Brands earned $ 1.25 per share in the most recent quarter, beating Wall Street estimates.
“L Brands achieved record profit in the first quarter, driven by the continued strength and exceptional performance of Bath & Body Works and Victoria’s Secret,” L Brands CEO Andrew Meslow said in a statement. through positive customer responses to our assortments, which has enabled us to reduce promotional activity and substantially increase our merchandise margin rates. “
L Brands said last week its intention to split Victoria’s Secret into a separate public company. The company has targeted August for the split.
In addition, the company announced the appointment of CFOs for the two brands.
Wendy Arlin, currently senior vice president of finance and controller at L Brands, will become CFO for Bath & Body Works. Tim Johnson, previously CFO and COO of Big Lots, will become CFO of Victoria’s Secret.
As previously announced, Current L Brands CFO Stuart Burgdoerfer to retire when the two brands separate.
The results were released after the market closed on Wednesday.
L Brands shares fell 3.5%, or $ 2.45, to $ 67.04 in trading on Wednesday. Over the past year shares of L Brands have surged and are now trading at an all time high for several years.