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L Brands Missed Q4 Sales Projections and Shares are Sliding

L Brands Inc., the parent company to Victoria’s Secret, Pink and Bath & Body Works, on Wednesday reported mixed fourth-quarter results and investors weren’t happy about it.

In a Nutshell: L Brands managed a beat on Wall Street’s fourth-quarter estimates for diluted earnings per share, although it did miss sales projections. Investors punished the stock in after-hours trading, sending shares of L Brands down 9.7 percent to $24.67 short after the results were disclosed. L Brands reported earnings after Wednesday’s trading session ended.

Sales: The company said net sales inched up by 0.006 percent to $4.85 billion for the quarter ended Feb. 2, compared with net sales of $4.82 billion in the year-ago quarter. Comparable sales rose 3 percent. The company also said operating income fell 19 percent to $799.4 million from $986.6 million.

Earnings: Net income fell 18.7 percent to $540.1 million, or $1.94 a diluted share, from $664.1 million, or $2.33, last year. On an adjusted basis, EPS was $2.14 for the quarter versus $2.11 a year ago. The company had a pre-tax charge in the period connected to its La Senza sale, versus a pre-tax charge a year ago related to a loss on the early extinguishment of debt that was offset by a tax benefit due to new U.S. tax legislation.

Wall Street was expecting diluted EPS of $2.07 on sales of $4.88 billion.

For the 2019 outlook, L Brands said it expects full-year EPS in the range of $2.20 to $2.26, with break-even earnings per share result in the first quarter.

The company will host a conference call to Wall Street analysts Thursday morning.