L Brands Profit Rises, But Details Weak Outlook - Update

(RTTNews) - Women's apparel and personal care products retailer L Brands Inc. (LTD), Wednesday said its profit for the fourth quarter increased despite a revenue decline, due mainly to lower expenses and the absence of a goodwill impairment charge recorded last year. Earnings for the quarter easily trumped Wall Street estimates, but revenues fell short of expectations.

Moving forward, L Brands, the owner of Victoria's Secret and Bath & Body Works chains, detailed a weak earnings forecast for the first quarter and full year 2014.

Columbus, Ohio-based L Brands' fourth-quarter profit rose to $489.6 million or $1.65 per share from $411.4 million or $1.39 per share last year. On average, 32 analysts polled by Thomson Reuters expected earnings of $1.61 per share for the quarter. Analysts' estimates typically exclude special items.

Last year's result included a goodwill impairment charge of $93.2 million.

The company, formerly called Limited Brands Inc., said sales for the fourth quarter dropped to $3.82 billion from $3.86 billion last year. Analysts estimated revenues of $3.89 billion for the quarter.

Same store sales, or sales from stores open for at least a year, increased 1 percent compared to last year.

L Brands has been able to post improved profits for the past few quarters on the back of strong performance of its lingerie retail chain Victoria's Secret and Bath & Body Works, which sells personal-care products. Nonetheless, retailers were broadly affected during the holiday quarter due to higher promotional costs as well as to the bad weather that kept shoppers at home.

General, administrative and store operating expenses dropped to $778.8 million from $835.3 million last year.

Looking forward to the full year 2013, L Brands expect earnings of $3.00 to $3.20 per share. Analysts currently estimate earnings of $3.30 per share for 2014.

For the first quarter, the company expect earnings in the range of $0.44 to $0.49 per share Analysts currently estimate earnings of $0.52 per share for the first quarter.

The company said it expects to report February comparable store sales in line with its previous guidance which is flat to up low-single digit.

LB closed Wednesday's trading at $56.57, up $2.18 or 4.01%, on the NYSE. The stock, however dropped $0.08 or 0.14%, in after-hours trade.