L Brands Stock Tumbles as Earnings Show the Worst Isn’t Over

A general view of the atmosphere at Victoria's Secret in Costa Mesa California

Gap, JCPenney, and Victoria's Secret announced more than 300 store closures over the course of 24 hours this week, sending a clear signal that the fallout from the retail apocalypse is far from over.

"Our store closure plans are heightened in 2018 and we've pulled back on investing in new stores and the remodeling of stores substantially over the last several years", L Brands chief financial officer Stuart Burgdoerfer told investors during a conference call Thursday morning.

Its parent company L Brands reported fourth-quarter earnings after market close on Wednesday.

To add it on, Victoria's Secret has a new competitor, Target, who is on the move to take up a portion of the lingerie and sleepwear industry.

Apparently, those Christmas and Black Friday shoppers weren't interested in Victoria's Secret, despite coupons and other promotions that the stores tried to use to bring more people inside. Lingerie startups that offer cheaper bras through online sales are also becoming a hit.

The company has taken several hits over the past couple of years, with almost 30 stores shut down in 2018, Business Insider reports.

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All three companies reported declining same-store sales during the critical holiday period.

Analysts on average had expected the company to report quarterly adjusted earnings of $2.07 per share, on revenue of $4.88 billion, according to IBES data from Refinitiv.

"The most important thing, in our view, is the merchandise", he said.

However, the company has not seen enough growth in the last quarter.

"If the merchandise is special, unique, reflects fashion, has newness ... there are terrific opportunities".

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