By Christiana Sciaudone
Investing.com -- L Brands (NYSE:LB) may have found the right recipe. Shares are rallying 15% after the Victoria's Secret owner reported figures that far outstripped those from a year earlier.
Bath and home products like Winter Candy Apple (NASDAQ:AAPL) fragrance and Blueberry Sugar candles continued to be the big sellers, pumping revenue higher. Victoria's Secret, which had looked like a big drag on the company, appears to be recovering, if ever so slightly.
“L Brands reported a record third quarter, driven by exceptional results and continued strength at Bath & Body Works, and a significant improvement in performance at Victoria’s Secret," said Chief Executive Officer Andrew Meslow in a statement.
L Brands earnings per share of $1.13 beat the estimated $1 on sales of $3.06 billion, higher than the expected $2.66 billion. EPS compared to a loss per share of 91 cents in the same quarter in 2019, while revenue a year ago totaled $2.677 billion.
Third quarter operating income at L Brands was $580 million compared to an operating loss of $151 million last year, and net income was $330 million compared to a net loss of $252 million last year.
Bath & Body Works represented the lion's share of the growth, with same-store sales up 56% year-on-year. But Victoria's Secret is recovering, with same-store sales up 4% compared to a year earlier, when they dropped 8%. That said, overall sales at the lingerie maker dropped 14%. The company also succeeded in cutting costs for the quarter.
L Brands is prudent amid the good news.
"We are cautious about our ability to exceed last year’s fourth quarter sales and earnings results, given anticipated constraints on store traffic, online fulfillment and shipping capacity, as well as other uncertainties related to the COVID pandemic," Meslow said.
Meanwhile, Macy's (NYSE:M) eked out better-than-expected results, but shares were little changed.
Macy's reported a loss per share of 19 cents, better than the expected loss of 84 cents. Sales of $3.99 billion were higher than the estimated $3.88 billion.