L Brands, parent company of the Victoria’s Secret and Bath and Body Works chains, saw its shares plunge Thursday after reporting fourth-quarter earnings.
Net sales for the fourth quarter ended Jan. 28, 2017, were $4.489 billion, an increase of 2 percent compared to $4.395 billion for the quarter ended Jan. 30, 2016. Comparable sales for the fourth quarter ended Jan. 28, 2017, were flat.
Victoria’s Secret saw sales drop after cutting its and apparel categories last year. The changes had a negative impact of 2 percentage points and 4 percentage points to total company and Victoria’s Secret comparable sales, respectively.
L Brands operates Victoria’s Secret, PINK, Bath & Body Works, La Senza and Henri Bendel brands. The company operates 3,074 company-owned stores in the United States, Canada, the United Kingdom and Greater China, and its brands are sold in more than 700 additional franchised locations worldwide.
There are 998 Victoria’s Secret stores in the U.S. and 133 PINK stores which target college students. There are 1,591 Bath and Body Works stores in the U.S.
Net sales at L Brands for the year ended Jan. 28, 2017, were $12.574 billion, an increase of 3 percent compared to $12.154 billion for the year ended Jan. 30, 2016. Comparable sales for the year ended Jan. 28, 2017, increased 2 percent. For the year, the exit of the swim and apparel categories had a negative impact of 2 percentage points and 3 percentage points to total company and Victoria’s Secret comparable sales, respectively. Net income for the year was $631.7 million.
The company warned February sales could decline in the mid-to-high teens, below expectations for a mid-single digit decrease, reflecting a decline of about 20 percent at Victoria’s Secret and a mid-single digit decline at Bath & Body Works.
Shares in L Brands dropped 16% in trading on Thursday.