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Victoria’s Secret Still Can’t Find its Way as Sales Continue to Slip

L BrandsVictoria’s Secret business is still trying to find its way, as store comps decline further versus a year ago.

In a Nutshell: L Brands reported mixed second-quarter results Wednesday, pointing to a still struggling Victoria’s Secret business, which saw declines in comps for stores and for stores and direct-to-consumer combined. The company reported results after the stock market closed Wednesday, and will hold a company conference call Thursday morning. Investors will probably have to wait until Investor Day next month to hear what John Mehas, the new Victoria’s Secret Lingerie chief executive officer, has to say on what the plan will be to overhaul the intimates brand.

Net Sales: Total net sales for the quarter ended Aug. 3 fell 2.8 percent to $2.90 billion from $2.98 billion, while consolidated comparable sales was down 1 percent, versus up 3 percent a year ago.

Sales at Victoria’s Secret was down 6.9 percent to $1.61 billion from $1.72 billion. Comparable sales at store and DTC combined fell 6 percent on top of the 1 percent decline a year ago. Comps at just its store business fell even further to 9 percent in the quarter, on top of a 5 percent decrease a year ago.

L Brands’ other business, Bath & Body Works, posted a 10.1 percent increase to $1.06 billion. It also posted positive comps, but even that saw a slowdown from a year ago. Comparable sales for stores and DTC were up 8 percent, on top of a 10 percent gain a year ago. At just its stores, comps were up 4 percent, on top of the 7 percent increase a year ago.

The remaining revenue was mostly from retail sales from company-owned stores outside of the U.S. and Canada, and from direct sales in China.

Earnings: Net income for the period dropped 62 percent to $37.6 million, or 14 cents a diluted share, from $99.03 million, or 36 cents, a year ago. Excluding one-time charges related to the early extinguishment of debt, adjusted earnings per share was 24 cents.

Wall Street was expecting 20 cents on revenue of $2.95 billion.

L Brands guided third quarter EPS to a range between a loss of five cents to a profit of five cents. Analysts were estimating a third quarter-profit of 7 cents a share. For the full year, the company reiterated guidance of adjusted EPS at between $2.30 to $2.60.