Operating Margin Compression Leaves Us Questioning Brand Equity; Placing L Brands Under Review
LB continues to suffer from slowing mall traffic, a heightened promotional environment, and rising product substitution, which has affected operating margin and ROIC performance over the last few years. With operating margin expected to tumble to just 11% in 2018 from 18% and 2015 and adjusted ROICs that are expected to fall to 16% from 28% over the same time frame, we believe it is prudent to reassess our long-term thesis on the business to determine whether trends in brand equity are permanent...L Brands is a holding company. Through its subsidiaries, the company is a specialty retailer of women's intimate and other apparel, personal care, beauty and home fragrance products. The company sells its merchandise through company-owned specialty retail stores in the U.S., Canada, the U.K., Ireland and Greater China, and through its websites and other channels. The company's other international operations are primarily through franchise, license and wholesale partners. The company has three reportable segments: Victoria's Secret, Bath & Body Works and Victoria's Secret and Bath & Body Works International. The company operates the following retail brands: Victoria's Secret, PINK and Bath & Body Works.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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