L Brands Inc. reported better-than-expected first-quarter earnings per share but sales at its lingerie banner Victoria's Secret took a hit as the brand exited the apparel and swimwear categories.
The company said earnings per share came in at 33 cents for the fiscal first quarter ended April 29, which beat the mean consensus of analysts' estimates for normalized EPS of 30 cents, according to S&P Capital IQ. The EPS of 33 cents, however, was lower than the 52 cents per share the company earned for the same period a year prior.
The company said a delay in income tax refunds to consumers got the year off to a slow start in terms of sales.
"After a particularly challenging February, which we believe was related in part to a delay in the timing of income tax refunds, we gained momentum through the remainder of the quarter," Stuart Burgdoerfer, the company's CFO, said during the earnings call.
L Brands slightly increased its EPS guidance for the full year, from a range of $3.05 to $3.35 to $3.10 to $3.40 per share, and issued guidance for fiscal second-quarter EPS of between 40 cents and 45 cents.
The apparel company said first-quarter net income declined 38.2% to $94.1 million from $152.3 million for the same period a year ago.
L Brands said its first-quarter revenue dropped 6.5% to $2.44 billion from $2.61 billion, while operating income declined 35.3% to $209.1 million from $323.4 million.
Comparable store sales at L Brands decreased 9% for the fiscal first quarter compared to a 3% increase for the same period a year ago.
The company said Victoria's Secret's move to no longer sell apparel or swimwear accounted for 6% of the 9% drop in the overall same-store sales figure. Same-store sales for just the Victoria's Secret chain declined 14%.
A bright spot cited by the company during the earnings call was growth in both home fragrance and body care at its Bath & Body Works banner, where overall comparable sales grew by 2% for the quarter.