(Filed Under Financial and General Interest News). Victoria’s Secret November comparable sales declined 3% (while the brand’s direct channel sales increased by 9%) as parent L Brands, Inc. overall net sales rose to $988.5 million for the four weeks ended Nov. 30, 2013, compared to net sales of $922.0 million for the four weeks ended Nov. 24, 2012.
Overall, the company, which also owns the La Senza lingerie stores (mainly located in Canada) as well as Bath & Body Works, reported a comparable sales decrease of 5% for the four weeks ended Nov. 30, 2013, compared to the four weeks ended Dec. 1, 2012. The firm placed most of the blame for the decreases on a later Thanksgiving this year.
The company reported net sales from all its divisions “of $7.944 billion for the 43 weeks ended Nov. 30, 2013, an increase of 6 percent compared to net sales of $7.525 billion for the 43 weeks ended Nov. 24, 2012. The company reported a comparable store sales increase of 2 percent for the 43 weeks ended Nov. 30, 2013, compared to the 43 weeks ended Dec. 1, 2012.”
Amie Preston, chief investor relations, in discussing the results noted that “For the total company, the Thursday, Friday and Saturday of Thanksgiving met our expectations with total retail sales, including demand in our direct channel, up 9% to the comparable period last year.”
For the company, Preston continued, “The merchandise margin rate was down to last year,” and “Inventories ended the month up 13% per square foot at cost, in line expectations. As a reminder, inventory reflects additional investments in bras at Victoria’s Secret, including sport. It also includes discontinued Body By Victoria product that will be cleared in the January semi-annual sales.”
At Victoria’s Secret stores, “November began with a focus on our Very Sexy Bra collection coupled by our VS Night Fragrance. During the month, our focus shifted to holiday and the month finished with the Thanksgiving holiday and Black Friday weekend when our focus was on gifting. We are pleased with our Black Friday sales, which met expectations for the stores business.”
At Victoria’s Secret stores, as with the firm as a whole, the merchandise margin rate “was down to last year, driven by incremental promotional activity, primarily at Pink.”
Speaking about the current month at Victoria’s Secret, Preston said “Our in-store focus for December will be on holiday gifting and on celebrating the fashion show, which airs on December 10th featuring musical performances from Taylor Swift, Fall Out Boy and others.”
“At Victoria’s Secret Direct, November sales increase 9%, as strength in bras, Pink, sleepwear and beauty offset a decline in apparel,” continued Preston. “While the apparel category was down to last year, results improved versus the previous trend.” She added that here as well, “The merchandise margin rate was down to last year, driven primarily by markdowns in apparel.”
“At La Senza, November comps were flat. The business had a strong Black Friday. The merchandise margin rate was down significantly to last year driven by increased promotional activity.”
“We are projecting positive low to mid-single digit comps in December,” for La Senza.
The situation was more difficult at the firm’s non-apparel division. “At Bath & Body Works, November comps were down 7%, driven by the later timing of Thanksgiving this year and performance that was below our expectations throughout the month, including Black Friday.”
“The merchandise margin rate for the month was down slightly to last year, driven by an increase in traffic driving promotional activity. December will feature new fragrances, holiday collections and great gifts. We will also feature the launch of our newest seasonal signature collection fragrance, Velvet Sugar. After Christmas we transition to our semi annual sale theme.”
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