L Brands Shares Tumble on Sales Weakness

L Brands Inc. on Thursday posted sales growth below expectations amid continued weakness at its Victoria's Secret business, which the company said last month that it would restructure.

Shares tumbled 11% in morning trading to $71.10, a new 52-week low.

For the first quarter, L Brands said sales rose 4.1% to $2.61 billion, below analysts' estimates for $2.67 billion, according to Thomson Reuters. Same-store sales increased 1%, as a 1% decline at Victoria's Secret dragged on a 5% increase at Bath & Body Works.

The company said it expects to report adjusted first-quarter earnings at the high end of its previous guidance for 50 to 55 cents a share. But that guidance, when issued, was well-below consensus views for 64 cents a share.

In early April, L Brands said it would restructure its Victoria's Secret business in an attempt to streamline operations, end mailings of its catalog and focus more on its core merchandise. The moves came shortly after Sharen Turney resigned as Victoria's Secret chief executive.

The company has said it plans to reorganize Victoria's Secret into three units: Victoria's Secret Lingerie, PINK and Victoria's Secret Beauty.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

May 05, 2016 10:35 ET (14:35 GMT)

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