Victoria’s Secret parent company L Brands said sales for the year increased in 2018 despite decreasing comp sales at the company’s lingerie brand, which led to profits sliding.
The U.S. lingerie, beauty and homewares firm said net sales in 2018 reached $13.237 billion, compared to $12.632 billion. Total company comparable sales increased 3% in 2018, thanks to a strong comparable sales rise of 11% at Bath & Body Works banner. However, annual comps were hindered by a 2% decrease at the struggling Victoria’s Secret, which set the course for the company’s bottom line.
The company’s full-year operating income totaled $1.237 billion, compared to $1.728 billion in fiscal 2017, while net income came to $643.9 million, or $2.31 per share, compared to $983.0 million, or $3.42 per share.
For the fourth quarter, L Brands said net sales for the thirteen weeks ended February 2, 2019, totalled $4.852 billion, a slight increase from the $4.823 billion.
Likewise, L Brands’ fourth-quarter operating income in the last quarter came to $799.4 million, down from $986.6 million in the prior-year period, and net income fell to $540.1 million, compared to $664.1 million.
Profit in the quarter was negatively impacted by $99.24 million in expenses related to the company’s sale of La Senza.
Looking ahead, the company said it expects 2019 full-year earnings per share to be between $2.20 and $2.60, including close to breakeven earnings per share result in the first quarter.
The lacklustre result is a common theme for the lingerie brand in recent quarters, which has dragged down L Brands’ overall results over the last year, as it struggles to keep up with changing consumer tastes, which are increasingly prioritizing inclusivity, body positivity and comfort.
In a move to improve the business, Victoria’s Secret recently reintroduced its discontinued swimwear range. It also opened its first flagship store in Australia late last year.