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L Brands Beats Estimates During Soft March Business
L Brands—the parent company of Victoria’s Secret, PINK and Bath & Body Works—beat Wall Street estimates.
L Brands posted a 3 percent increase in its same-store sales. Ken Perkins of Boston-area analysts Retail Metrics forecast that the company’s same-store sales would only increase 1.9 percent. Gap Inc. posted a 6 percent same-store-sales decline. Perkins said the retail giant missed his company’s forecast for 5 percent. In an April 7 note, Perkins said that Gap started business March with excess inventory due to slow traffic and conversion that held the company back for much of 2016. A Gap executive said that business in March was hard. “While March proved challenging, we remain focused on taking the necessary steps to improve results across the portfolio throughout the year,” said Sabrina Simmons, chief financial officer, Gap Inc.
All of Gap’s divisions posted declines in their March business. Gap Global reported a 3 percent decline in March comp sales, and Banana Republic global posted a 14 percent decline in its March comp sales. Discount division Old Navy Global turned in a 6 percent decline in its comp sales.
The big retail events for March were spring break and an early Easter holiday, which fell on March 27 this year. (Last year, the holiday fell on April 5.) Adrienne Yih Tennant of Wolfe Research said that retailers offered teens deep discounts during spring break. One of those retailers offering deep promotions was Zumiez Inc., Yih Tennant said in an April 7 research note.
The Washington state–headquartered retailer reported a 7.8 percent decline for its March sales. The forecast was that Zumiez would only post a decline of 6.4 percent during the month. “We believe the days leading up to Easter were softer than expected,” Tennant wrote.
