Will L Brands’ Top-Line Performance Impress in 2019?

What You Can Expect for L Brands in 2019 (Continued from Prior Part) ## Sales to improve L Brands (LB) is one of leading intimate apparel manufacturers and distributors in the United States. Its major brands include Victoria’s Secret and PINK. For the fourth quarter of 2018, Wall Street analysts expect L Brands net sales to rise 1.9% YoY (year-over-year) to $4.91 billion. For fiscal 2018, analysts forecast L Brands net sales growth of 5.3% YoY to $13.30 billion. However, for 2019, analysts expect sales to report an increase of 1.4% to $13.48 billion on a YoY basis. ## What’s in store for L Brands in 2019? Strength in the Bath & Body Works brand has been cushioning its top line. Comparable store sales growth for L Brands has been positive in the last three quarters of 2018 mainly due to Bath & Body Works. It’s looking to re-enter certain categories, including swimwear, footwear, and eyewear, to boost its top line. It has discontinued its Henri Bendel operations and found a suitable buyer for its loss-making La Senza lingerie brand. L Brands is also developing its beauty business, which comprises fragrances and mists. Sales also could to benefit from momentum in its digital business. However, the troubled Victoria’s Secret and PINK businesses are a sore point for L Brands. Victoria’s Secret was once the ultimate destination for lingerie shopping for American women. Though it still commands a big share of the US lingerie market, a surge in the body positivity movement and the demand for comfortable lingerie has severely affected sales. Also, declining traffic at malls has added to the troubles. American Eagle Outfitters’ (AEO) Aerie brand’s success underscores these shifting trends. Aerie’s focus on a wide range of sizes, hiring plus-sized models and not photoshopping its ads has worked wonders. The Aerie brand is expected to top $1 billion in revenue in the near term. Apart from Aerie, other retailers who are also embracing this body positivity trend include Lively and ThirdLove. ## Expectations for peers For fiscal 2018, analysts expect Abercrombie & Fitch (ANF) to report sales growth of 2.2% YoY to $3.57 billion. For American Eagle Outfitters’ fiscal 2018 Wall Street analysts project revenue growth of 6.4% YoY to $4.04 billion. Continue to Next Part Browse this series on Market Realist: * Part 1 - What Wall Street Recommends for L Brands * Part 2 - Comparing L Brands’ PE Multiple with Peers’ * Part 4 - A Look at L Brands’ Margin and Bottom-Line Expectations