May 20, 2020 / 8:57 PM / 9 days ago

UPDATE 2-L Brands results underwhelm as pandemic keeps stores shut

(Adds background, sales details, COO departure, shares)

May 20 (Reuters) - L Brands Inc posted worse-than-expected quarterly results on Wednesday, as its struggling Victoria’s Secret and growing Bath & Body Works businesses were hammered by disruptions caused by the coronavirus outbreak.

Sales at Victoria’s Secret, the lingerie brand the company is planning to run as a separate business after failing to sell a majority stake, nearly halved to $821.5 million in the first quarter ended May 2.

Meanwhile, sales in the Bath and Body Works personal-care products unit declined 18% to $712.7 million, the first drop in 10 quarters.

All of Victoria’s Secret and Bath & Body Works stores have remained shut since March 17 due to lockdowns imposed to curb the spread of the virus.

L Brands also did not provide second-quarter or full-year 2020 earnings forecast, citing a high level of uncertainty.

The company also said Chief Operating Officer Charles McGuigan would leave the role he has held since May 2012 and would no longer serve as the head of sourcing and production, effective July 4.

In line with earlier announcements, Leslie Wexner, who bought Victoria’s Secret in 1982, stepped down as CEO of L Brands last week, with Bath & Body Works CEO Andrew Meslow replacing him.

Columbus, Ohio-based L Brands posted a net loss of $296.9 million, or $1.07 per share, compared with a profit of $40.3 million, or 14 cents per share, a year earlier, also hit by a $96.8 million impairment charge.

Excluding items, L Brands posted a loss of 99 cents per share, while analysts on average had expected a 72 cents loss, according to IBES data from Refinitiv.

Net sales decreased 37% to $1.65 billion, below Wall Street’s estimate of $1.72 billion.

Shares of the company fell 1.8% in extended trading.

Reporting by Praveen Paramasivam in Bengaluru; Editing by Sriraj Kalluvila

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