- Victoria's Secret has yet to stem its sales declines, but the company is hopeful that new products will win back customers.
- The brand is pursuing a "more elevated product— more glamour, more fashion, a lot of emotional content," said L Brand CFO Stuart Burgdoerfer
- L Brands reported its mixed fiscal third-quarter earnings after the bell Wednesday. The company fell short of revenue estimates, though matched earnings expectations.
Victoria's Secret has yet to stem its sales declines, but the company is hopeful that new products will win back customers.
The brand is pursuing "more elevated product — more glamour, more fashion, a lot of emotional content," said L Brands CFO Stuart Burgdoerfer on the company's fiscal third-quarter earnings call Thursday morning.
Its investments in higher-quality fabrics and its design aesthetic, particularly in the sleep and loungewear category, have "gotten a strong consumer response" so far, Burgdoerfer said.
Some analysts, however, are not as optimistic about the company's future. Jefferies analyst Randal Konik noted Wednesday that stronger sales at PINK were simply due to higher amounts of promotions.
But shares of Victoria's Secret parent company L Brands were up more than 7% in midday trading Thursday in the wake of its latest quarterly results, which were reported after the bell Wednesday. Although the company fell short of revenue estimates, its adjusted earnings were in line with analyst estimates. It also estimated fiscal 2019 earnings would be within a range it forecast previously.
At Victoria's Secret same-store sales were down 7% during the quarter, and same-store sales growth has declined for the past six quarters.
Burgdoerfer doesn't expect the cancellation of this year's Victoria's Secret fashion show to impact its fiscal fourth-quarter earnings. He said there never was a material financial impact after the show, though it nonetheless helped build the Victoria's Secret brand.
At L Brands' Bath & Body Works same-store sales rose 9% during the quarter. Burgdoerfer said that overall traffic and same-store sales at these stores are healthy and relatively stable.
The brand, however, has seen slowing same-store sales growth, and some analysts, including Konik have been concerned that its growth has peaked.
L Brands shares are down more than 32% year to date.