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L Brands (LB) Stock Swings Lower on Weak June Sales

On Thursday, shares of Victoria’s Secret parent company L Brands Inc. LB are falling, down almost 11% to $48.31 per share in morning trading after the retailer announced disappointing June sales numbers.

L Brands, which also owns Bath & Body Works, said that net sales for June declined 6% to $1.21 billion compared to $1.296 billion in the year-ago period. Same-store sales in the same five-week period ending July 1 were down 9% year-over-year.

In particular, the L Brand’s decision to exit the swim and apparel categories hurt total company and Victoria’s Secret same-store sales by 7 and 10 percentage points, respectively. The company decided to leave these businesses largely so it could focus on its more profitable segments, as well as push into lower-priced sports bras and unstructured bralettes; these items are very popular with L Brands’ core customer base, who have been turning to rivals like Aerie, owned by American Eagle Outfitters AEO.

L Brands also said that sales of $4.42 billion for the 22 weeks ending July 1 were down 6% from the $4.73 billion reported in the prior year period. Same-store sales for this period fell 9%.

L Brands is currently a #3 (Hold) on the Zacks Rank, with a VGM score of ‘B.’ Shares of LB are down 18.7% year-to-date, and nearly 21% in the past 12 months.

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