I Was So Wrong About L Brands

L Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, personal care, and beauty and home fragrance products. The company operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International.

Several years ago, L Brands is said it was exiting Victoria’s Secret swimsuit business after the company deemed the swimsuit business as a “non-core” category, but instead in recent years, decided to put energy and resources into that part of the business.

L Brands has struggle alongside Victoria's Secret. The lingerie retailer has missed key fashion trends and the competition continues to eat into its market share as many of their startup competitors are online and are in front of the customer first. Despite owning Bath & Body Works, since Victoria's Secret still represented the majority of L Brands revenue, accounting for over 52% of the total revenue, I thought it was lights out for L Brands.

I have been following L Brands since the March lows and it has been one of the best performing stocks on Wall Street since that time...what gives?

The recovery continues at Victoria’s Secret, with both Wall Street and at least some consumers rallying behind the lingerie brand.

Parent company L Brands released quarterly earnings results Wednesday evening, beating analyst expectations and improving on both top and bottom lines, year-over-year.

While most of the gains were in the Bath & Body Works business, the lingerie giant showed some signs of progress as well. Total comparable sales were up 4 percent in the Victoria’s Secret business, while sales in the direct-to-consumer channel, which includes e-commerce, rose 42 percent for the quarter, year-over-year. Comparable Victoria’s Secret stores sales, meanwhile, were down 10 percent during the quarter.

Source

Andrew Meslow, chief executive officer of L Brands said as they head into the holidays, they are confident in the strength of their brands and remain focused on execution and delivering the best possible outcome for the fourth quarter.

After holding the month demand, price is now well above the monthly supply that was breached months ago.

Now price has the backing of another monthly demand at $30 as price continues to move higher.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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