Solid Store 99% Of Cash Flow Positive, Online Business Maintained Strong Growth.

According to the world clothing and shoe net, L Brands Inc. (NYSE:LB) lowered its annual profit outlook on the basis of its two quarter sales expectations, indicating that the s group, which owns Victoria 's Secret Vitoria and Bath and Body Works Works two brands, is reversing the road to recovery.

The group's share price fell 10% after Wednesday, falling to its lowest level in 5 and a half years.

L Brands Inc. lowered its EPS forecast in the current fiscal year from the original 3.10-3.40 US dollar to US $16.7%, the market expectations of US $3.23, and EPS EPS in the three quarter, which is 16.7% lower than the US $0.36 expected.

In the two quarter ended July 29th, the group achieved a net profit of $138 million 900 thousand, down 45% from $252 million 400 thousand a year ago, and EPS declined from $0.87 to $0.48.

The $0.48 adjusted EPS is better than Factset's combined estimate of $0.45.

Gross profit margin fell by 120 basis points to 37.3%.

Although Victoria's s Secret, Vitoria's Secret commodity gross margin has improved, it has been completely offset by the rise in total purchases and occupancy expenses.

As of July 29th, stock per square meter was reduced by 9% compared with the same period last year.

In pursuit of fashion trends and young consumer groups, Victoria 's Secret

The increase in supply demand and the lower price and profit margins of the bralette and sports bra, resulting in sales figures and profitability are all dragged down.

Sales of bralette and sports bra almost doubled in the two quarter compared with the same period last year, pushing the sales volume of bra sales to reach a median increase. However, the lower AUR of this category led to a decline in the number of bra sales.

Besides, underwear sales are not as good as expected.

PINK and the beauty business are growing in median and low digits respectively, but the beauty business in the international market is still in the doldrums.

As Victoria 's Secret Vitoria's secret exit from swimwear and clothing business had a negative impact on group and brand store sales 6% and 9% respectively, the same quarter sales of L Brands Inc. in the two quarter decreased 8% compared with the same period last year, which was higher than 7% of the market forecast. Victoria's S Secret Secret Vitoria's Secret fell by 14%, and the same store sales decline has been extended to eighth months.

Bath & Body Works, however, recorded an increase of 6%, but the brand accounted for only 30% of the group's sales.

Analysts now suspect that the strategy of the group's withdrawal and catalog business has also hit sales.

Jefferies Group LLC Jie Fu Li analyst Randal Konik said that the two categories of 400 million swimsuits and costumes sold in 2016 were not the result of the retrogression of L Brands Inc.. He believed that the withdrawal of catalog business might be a mistake.

In May, he published a research report on L Brands Inc.. He believes that more and more evidence shows that the secret monopoly of Victoria 's Secret' Vitoria is collapsing day by day. Not only the core bra category has been shrinking, but also the growth of the Pink series is slowing down.

The loss is accelerating.

Based on the weak sales in the two quarter, L Brands Inc. has lowered its expected sales performance in the three quarter from low single digit growth to flat last year to low single digit declines.

The group emphasizes that physical stores still have high sales productivity, 99% of shops have positive cash flow, and online business has maintained strong growth. Victoria 's Secret Vitoria's secret business continuity category and Bath & Body Works have increased by 11% and 16% respectively.

However, the trend of passenger flow decline is always difficult to reverse.

In the two quarter, the number of passenger traffic dropped by a high figure, and business restructuring and promotions resulted in a double blow than the same period last year.

In the international market, thanks to China's business and VSFA franchise, the two quarter revenue rose 14% to 113 million 900 thousand US dollars.

The group revealed that because of Victoria's' s Secret 'Vitoria's secret exit from swimwear and clothing business, all stores except China had regressed.

In February this year, two VSFA were opened in Shanghai and Chengdu.

After that, 4 similar stores will open for guests this year.

In addition, Victoria's s Secret, Vitoria's Secret Beauty and accessories store continues to record healthy sales growth in the same store.

During the two quarter, the group also shifted the mainland's online business from Tmall international to Tmall's domestic platform.

The latest information, please pay attention to the world clothing shoes and hats net.