LB - Embedded Expectations Analysis - 2018 08 14
L Brands, Inc. (LB:USA) currently trades below historical averages relative toUAFRS-based (Uniform) Earnings, with a 15.4x Uniform P/E, implying bearish expectations for the firm. Meanwhile, management has concerns about continued underperformance in their PINK channel, and their ability to create long-term value with new innovative investments
Specifically, management may have concerns about the sustainability of growth in the core categories at PINK, and continued erosion of spend level within the PINK Nation customer. Additionally, they may lack confidence in their ability to successfully relaunch the PINK beauty business, as well as their ability to balance innovation in their sports bras line while keeping them fashionable. Moreover, they may be concerned about the financial impact of launching their new magalog strategy, and their ability to engage new customers over time to drive brand loyalty. Finally, they may lack confidence in their ability to make innovative investments that will create long-term value
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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