Underwear Brand Vitoria Same Store Sales Increased 1% In April

The picture shows L Brands group's flag.

A secret store in Vitoria

brand

The secret parent company L Brands group recently announced its April and first quarter performance reports. As of April 30, 2016, the group's same store sales rose 1% in April, lower than Reuters's expected growth of 4.8%, resulting in the group's share price fell more than 12% to 70.53 yuan per share on Thursday.

According to the group earnings report, as of April 30, 2016, L Brands group's net sales increased by 2% to $737 million 500 thousand, while same store sales increased by 1%.

Last year, its net sales amounted to US $724 million 600 thousand for the four weeks ended May 2nd.

By brand, Vitoria's secret store sales fell 1% in April, and Bath &Body Works increased by 5%.

Previously, Reuters predicted that Vitoria's secret will grow by 4%, while Bath &Body Works will rise by 6.1%, and its performance is lower than analysts' expectations.

In the first quarter of April 30, 2016, group net sales increased by 4% to $2 billion 614 million, while same store sales increased by 3%.

Last year, in the first quarter of May 2nd, group sales amounted to $2 billion 512 million.

By brand, Vitoria's secret sales in the first quarter of this year amounted to $1 billion 740 million, while Bath &Body Works was $660 million.

Christian Buss, an analyst at Credit Suisse Credit Suisse, believes that weak demand may put pressure on profitability in the short term, thus maintaining a "neutral" investment rating.

He predicts that the total revenue of L Brands will fall from $12 billion 800 million to US $12 billion 700 million this year, and earnings per share will drop from US $4.16 to US $4.06.

Revenue in fiscal year 2017 is expected to drop from $13 billion 430 million to $13 billion 400 million, and earnings per share dropped from $4.54 to $4.48.

L Brands Group expects adjusted earnings per share of 0.50-0.55 dollars in the first quarter after adjustment, while Capital IQ expects earnings per share to be 56 cents in the first quarter.

In addition, the group will focus on digital business and actively expand its international business.

Even with these measures, analyst Christian Buss maintains that traditional retailers are cautious about expanding stores and turning entities to online channels.

L Brands group owns Vitoria's secret, PINK, Bath &Body Works, La Senza and Henri Bendel brand.

As of April 30, 2016, L Brands group operated 3038 self operated stores, accounting for 90% of the US market.

The total number of secret stores in Vitoria is 1209, adding 7 stores and closing 2 stores. The total number of Bath &Body Works stores is 1675 stores, with 4 new outlets and 1 stores closed.

The total number of Henri Bendel and La Senza brand stores is 29 and 125 respectively.

Among them, La Senza closes 1 stores.

4 in mid month, the US media reported that underwear giant Victoria's Secret will stop selling swimsuits at the end of 2016.

According to the US media Buzzfeed, an anonymous message means that it will stop the production and sale of swimwear lines, and pay more attention to its sports and leisure products catalogue.

Earlier, L Brands announced 200 redundancies, plans to restructure and reduce certain commodity categories.

Some analysts have pointed out that from the trend of performance, behind this multi billion dollar underwear business, the company has reason to start to tremble for the trend. Although Victoria's Secret has always enjoyed the reputation of the sexiest shop in fashion retailing, its iconic sexuality seems to be faced with severe challenges as the company tries to attract young consumers to the store.