L Brands Shares Fall After Cutting Dividend

NEW YORK, United States — L Brands Inc on Monday slashed its dividend by half and named a new chief executive for its Victoria's Secret lingerie brand, sending the apparel retailer's shares down 6 percent in extended trading.

The company, which reported better-than-expected third quarter results, cut its annual ordinary dividend to $1.20 from $2.40.

L Brands appointed John Mehas as the chief executive of Victoria's Secret, replacing Jan Singer.

Mehas joins Victoria's Secret from lifestyle brand Tory Burch and has previously worked with Polo Ralph Lauren's Club Monaco, Gap and Bloomingdales.

L Brands said sales at its established stores rose 4 percent in the quarter ended Nov. 3, topping analysts' average estimate of 1.53 percent, according to IBES data from Refinitiv.

Bath and Body Works, which makes fragrances and body care products, reported a rise of 13 percent in same-store sales, surpassing estimates of 8.3 percent.

Sales at Victoria's Secret stores that have been open for at least a year fell 2 percent, but were better than analysts' average estimate of a 4 percent decline.

The company also raised its full-year 2018 profit forecast range to $2.60 to $2.80 per share, from $2.45 to $2.70, its first raise after cutting in the previous two quarters.

Excluding items, L Brands earned 16 cents per share, 1 cent above Wall Street estimates.

Net sales rose 6 percent to $2.77 billion, also topping estimates.

The company reported a net loss of $42.8 million, or 16 cents per share, compared with a profit of $86 million, or 30 cents per share, a year earlier.

The loss was mainly due to charges of $101.2 million related due to an already announced plan to close its Henri Bendel and certain Victoria's Secret stores.

By Nivedita Balu in Bengaluru; editor: Maju Samuel