Traditional Underwear Is On The Verge Of Loss.

America's largest underwear brand Victoria 's Secret Vitoria's Secret (VS) is on the verge of collapse. Although its parent company L Brands Inc. (NYSE:LB) has refused to continue issuing monthly data since February, data released on Wednesday showed that in the first quarter, the sales of VS entity stores continued to decline, down by 7%. Meanwhile, the support strength of the electronic business was weakened, leading to a 5% decline in brand overall store sales.

In the first quarter of May 4th, VS revenue fell 5.9% to $1 billion 510 million 900 thousand, compared with $1 billion 589 million 400 thousand in the same period in 2018.

The company said it was not satisfied with VS's performance and was working to improve its performance.

At the same time when both stores and sales fell, VS almost lost its profitability. The first quarter operating profit was only $32 million 700 thousand, down 60.7% from a year earlier of $83 million 200 thousand, and operating margins further plunged by 300 basis points to 2.2%.

At present, the sales and profitability of VS, if not improved, may soon enter a real loss stage. The full open letter released by Group CEO Les Wexner in May 10th shows that the greater reform of VS may cancel the value base of Victoria's Secret Fashion Show.

In the social media age, especially in the two years of the rise of #Metoo campaign, the most widely criticized VS has lost its consumer base, especially the millennial female consumers.

Les Wexner also said that the fashion industry is a changing industry. Companies must evolve and change to grow, and believe that the form of live webcast is no longer suitable for the "secret show". This year and beyond, the company will focus on developing exciting, dynamic content and a new form of activity to be delivered to the company's customers.

L Brands Inc. has realized the critical juncture of VS, and began to implement the store strategy on a large scale last year.

The first quarter report showed that the company closed 35 VS stores in the US market in the past 3 months, from 957 to 922.

On the edge of loss on the edge of VS, the Bath & Body Works (BBW) of the support group has recorded a strong growth in the same store sales in the first three quarters of the past 13% years, of which 7% of the entity store business has continued to support the group.

However, the strength of BBW only offset the slump of VS. The group's first quarter of the same store was barely flat, lower than the 1.3% growth expected by analysts, and the overall sales of the same store also dropped by 3%.

Benefiting from BBW performance, the L Brands Inc. revenue in the first quarter remained unchanged, representing a slight increase of US $2 billion 628 million 800 thousand to US $2 billion 625 million 800 thousand over the 2018 fiscal year, far exceeding the market forecast of US $2 billion 560 million.

During the period, BBW revenue rose by 14.5% to $870 million 700 thousand, compared with $760 million 400 thousand in 2018.

In the same store sales incentive, BBW operating profit margin rose 150 basis points to 17.8% in the first quarter, operating profit increased 25.1%, from 123 million 700 thousand to 154 million 800 thousand U.S. dollars.

The strong performance of the beauty business stimulated L Brands Inc. to record $0.14 in the first quarter of the year, even though it fell 17.6% by 0.17 US dollars in the first quarter of 2018, but it was far better than the market expectation, and it only kept the breakeven.

The net profit fell from $47 million 517 thousand to US $40 million 255 thousand during the period.

In the first quarter earnings performance, L Brands Inc. raised the annual EPS forecast, from 2.20 to 2.60 US dollars to 2.30- 2.60 US dollars.

The expected earnings performance gave L Brands Inc. a rare chance to breathe, as the fourth poor retail share of the S & P 500 index in 2019 so far, just better than the Macy 's Inc. (NYSE:M) Messi department store, Kohl' sCorp. (NYSE:KSS) Kr, Nordstrom sCorp. (NYSE:KSS) Nodes Tron in the department stores.

In the just concluded season of department stores, the three companies, especially Colls and Nord, suffered a setback in their share price.

The shares of L Brands Inc. group rose nearly 14% after its performance, and it also rose 10% before Thursday.

However, as of Wednesday, L Brands Inc. shares plunged 26.30% this year, hitting a 52 week low and a new low in January 2010, while the S & P 500 index rose 13.94% during the same period.

No Agency analyst Tang Xiaotang and Jefferies analyst Randal Konik continue to play the role of "big friend" after the results are released.

Tang Xiaotang said that the deterioration of VS has been referred to as the pfer of physical stores to the electricity supplier channel. With the Amazon.com Inc. (NASDAQ:AMZN) Amazon, TargetCorp. (NYSE:TGT) Taghit and other electricity and department store giants launched the popular brands, the recession of the two major VS channels will further pmit each other, so that VS will enter a large number of American bankruptcy brands, loss, loss and closing of the death circle. "The time and space for the remodeling of VS are almost gone. The open letter of Les Wexner has already declared that the old and traditional Vic is dead."

Randal Konik said before Wednesday that the VS parity sub line young brand PINK continued to promote sales, and sales will be cut in the next one or two years.

He had previously predicted that BBW's performance and operating margin would be unsustainable.

However, after the announcement, he appreciated the strong performance of BBW, but said VS was collapsing and agreed with Tang Xiaotang that VS would soon lose money.

The analysis also suggests that investors should take advantage of this opportunity to escape quickly.

Telsey Advisory Group analyst Dana Telsey also agreed that VS has become the poison of the overall performance of the group; Deutsche Bank Deutsche Bank analyst Paul Trussell hopes that the new VS and new company will play its role in improving the business.

RBC Capital Market plus capital market analyst Kate Fitzsimons said that the first quarter results could relax the L Brands Inc. investors, maintain strong momentum for BBW, and tighten the outlook for VS earnings. Despite the year's earnings forecast, lingerie business still has a lot of room for improvement this year, and it is expected that this year's overall loss will be achieved.

On Thursday, Tang Xiaotang lowered the target price of L Brands Inc. from $18 to $15, or even lower than Randal Konik's lowest target price of 16 Brands for L Brands Inc. Wall Street.

According to the analysis, according to the feedback from suppliers, the clothing and retail industry in the United States has begun to prepare for the import of Chinese goods for 300 billion US dollars and can only be fully borne by Chinese suppliers, which will further combat VS's performance and competitiveness.

"Although less than 20% of the procurement comes from China, almost all of its purchases from Asia are mainly Chinese enterprises."