L Brands cautious despite 15% Q4 profit rise
- Q4 net profit up 15% to $564.8m
- Net sales rise 7% to $4.069bn
- Comparable store sales up 6%
Comparable store sales for Victoria's Secret stores climbed 4% in the quarter
Victoria’s Secret and La Senza owner L Brands posted a double-digit fourth-quarter profit rise – but worried analysts with cautious guidance for fiscal 2015.
L Brands chairman and CEO Leslie Wexner said of the results, which included sales and comps increases, with total revenues exceeding US$4bn: “We focused on the execution of fundamentals in the business in 2014, and we continued to get better throughout the year. I am optimistic heading into 2015.”
The US company said it expected full-year fiscal 2015 earnings per share to be in the $3.45-3.65 range, well below Wall Street’s expectations.
“It appears to us management expects to drive sales in 2015 by increasing promotions while reinvesting in long-term growth, hence the worse than expected gross margin guidance and higher operating expense rate,” said Stifel analyst Richard Jaffe.
Meanwhile, FBR & Co analyst Susan Anderson said the “light” guidance might reflect foreign exchange pressure, given the strong dollar and weak euro, as well as unfavourable tax rates, tougher comparisons and retail uncertainty.
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