WASHINGTON (dpa-AFX) - Women's apparel retailer L Brands Inc (LB), Wednesday reported a better-than-expected increase in first-quarter profit, driven mostly by higher sales across key brands.
Looking ahead, the company provided some soft earnings outlook for the second quarter, while slashing the upper end of its earnings outlook by five cents for fiscal year 2014.
Columbus, Ohio-based L Brands operates as a specialty retailer of women's intimate and other apparel, beauty and personal care products.
To spruce up margins, L Brands has focused on cost control and inventory management, and has striven to improve its merchandise even as consumer sentiment appears somewhat sluggish.
L Brands, the operator of Victoria's Secret and Bath & Body Works chains, reported first-quarter net earnings of $156.9 million or $0.53 per share, compared with $142.5 million or $0.48 per share last year.
On average, 27 analysts polled by Thomson Reuters expected earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the first quarter climbed to $2.39 billion from $2.27 billion a year ago. Twenty-four analysts had a consensus revenue estimate of $2.38 billion for the quarter.
On a same store basis, sales for the quarter were up 2 percent, compared with a 3 percent growth last year.
Meanwhile, many U.S. apparel retailers reported modest increases in same-store sales in April as warmer weather saw shoppers venture out for spring clothing. The month of May is also expected to be a strong one for retailers.
L Brand said its gross margin for the quarter declined 40 basis points to 41.1 percent, while operating margin improved to 14.1 percent from 13.7 percent.
For the second quarter,L Brands anticipate earnings of $0.57 to $0.62 per share, while analysts currently expect $0.61 per share.
For fiscal year 2014, L Brands now estimate earnings of $3.00 to $3.15 per share, from a prior guidance of $3.00 to $3.20 per share. Analysts currently expect earnings of $3.23 per share.
L Brands stock closed Wednesday's regular trade at $55.86, up $0.36 or 0.65%, on a volume of 2.8 million shares on the NYSE. In after hours, the stock gained $0.15 or 0.27%.
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