L Brands Q3 earnings: sales miss, dividend shrinks, CEO resigns

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• L Brands, the owner of Victoria’s Secret, beat on adjusted profits but slightly missed on sales.
• The company also slashed its annual dividend by half, in order to raise cash and reduce liabilities.
• Victoria’s Secret CEO Jan Singer has resigned and Tory Burch’s president John Mehas will replace Singer early 2019.
• Watch L Brands trade live.

L Brands, the owner of Victoria’s Secret, plunged by as much as 9% before Tuesday’s opening bell after the company slightly missed on third-quarter revenues and slashed its annual dividend payout. 

Here are the key numbers compared to Wall Street’s estimates, according to Bloomberg data.

• Adjusted earnings per share: $0.16 ($0.15 expected)
• Revenue: $2.775 billion ( $2.78 billion)
• 4Q earnings-per-share guidance: $1.9 to $2.1 ($1.99 expected)
• Full-year adjusted earnings-per-share guidance: $2.6 to $2.8 up from $2.45 to $2.7 ($2.66 expected)
• Annual dividend: $1.20 down from $2.40 

According to the retailer, it adjusted earnings by excluding $101.2 million pre-tax charges related to the closure of the Henri Bendel business and the impairment of certain Victoria’s Secret store assets. And, the approximately $325 million in cash made available from the dividend reduction will be utilized primarily to reduce liabilities.

The company also announced that Jan Singer, CEO of Victoria’s Secret Lingerie, has resigned, and Tory Burch’s President John Mehas will replace Singer early 2019.

“During the quarter, we made some tough decisions that enable us to increase our focus on our core businesses and highest growth opportunities,” Leslie Wexner, CEO of L Brands, said in a press release.

“These actions, including the closure of the Henri Bendel business and the pursuit of alternatives for La Senza, will strengthen our company in the long-term. Looking ahead, we remain focused on executing our strategy, sticking to the fundamentals of our business, staying close to our customers and leveraging the strength of our brands to deliver on our commitments for our customers, associates and stakeholders.”

Wexner continued: “I am confident that, under John’s leadership, Victoria’s Secret Lingerie, the world’s leading lingerie brand, will continue to be a powerhouse and will deliver products and experiences that resonate with women around the globe.”

L Brands was down 45% this year through Monday.

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