SAN FRANCISCO (Reuters) - Shares of U.S. shopping-mall retailers bounced back on Thursday after L Brands, the owner of Victoria’s Secret, reported a smaller-than-expected decline in March sales.
L Brands, which also owns Bath & Body Works and Henri Bendel, jumped 11.02 percent after it said same-store sales dropped 10 percent but noted that as much as 3 percentage points of that was due to the Easter holiday falling in April this year.
Many stores benefit from gift shopping at Easter, which was in March last year.
L Brands’ sales raised hopes that slumping sales may be hitting a floor in the brick-and-mortar retail industry, said Kelly Halsor, an analyst at Buckingham Research.
“Sentiment was so negative and L Brands was a perfect example,” Halsor said. “People were thinking it would be much worse.”
Mall traffic is dwindling across the United States, and thousands of stores are closing as consumers spend more at Amazon.com and other online clothing sellers like London-based Asos.
“The No. 1 issue is mall traffic and that’s largely a reflection of sales shifting online,” said Wedbush analyst Morry Brown. But he does not think it is time to start buying shares of apparel retailers, he added.
Also on Thursday, Bed Bath & Beyond jumped 3.39 percent in its best session since December after it reported a better-than-expected quarterly profit.
Apparel retailers also rose, with Nordstrom up 2.95 percent, Kohl’s adding 5.55 percent, Gap Inc jumping 5.02 percent, and Bebe Stores rising 4.46 percent.
L Brands’ stock remains down 27 percent in 2017 and Kohl’s has fallen 20 percent. Bed Bath & Beyond has dropped 20 percent in the past 12 months.
Reflecting concerns about L Brands’ future, the stock recently traded at 13 times expected earnings, the lowest since 2011, according to Thomson Reuters Datastream.
Reporting by Noel Randewich; Editing by Bernadette Baum and Richard Chang