By Micah Maidenberg
L Brands Inc. raised its profit outlook for the year as the retailer beat overall sales targets in the latest quarter thanks to Bath & Body Works.
The Columbus, Ohio-based retailer said Wednesday that comparable sales for Bath & Body Works, which include sales from company-owned stores in North America open at least a year and digital sales, jumped 13% in the fiscal first quarter.
Overall, L Brands reported net sales of $2.63 billion in its quarter that ended May 4, flat compared with a year earlier. Analysts polled by FactSet expected $2.56 billion.
Shares of L Brands shot up about 13% in after-hours trading.
Victoria's Secret, however, continued to struggle, with comparable sales dropping 5%. L Brands has been trying to turn around the business, which lost ground as its emphasis on racy undergarments and skinny supermodels fell out of fashion.
Last November, the company announced a new chief executive to lead the brand and halved its annual dividend to save cash.
L Brands reported a profit of $40.3 million, or 14 cents a share, for the latest quarter, down from $47.5 million, or 17 cents a share, a year earlier.
The company increased the low end of its profit outlook for its current fiscal year by 10 cents to $2.30 a share.
In March, activist investor Barington Capital Group LP urged L Brands to consider splitting its Bath & Body Works business from Victoria's Secret. The hedge fund also called on L Brands to replace board members to improve the diversity and independence of the board.
Under a deal struck in April, L Brands agreed to make Barington a special adviser to the company while Barington agreed to support the company's slate to the board.
The company has been trimming its portfolio of Victoria's Secret stores, closing 35 of those shops in the U.S. in its latest quarter. Meanwhile, it opened a net 11 Bath & Body Works in the U.S.
Write to Micah Maidenberg at email@example.com