L Brands CEO “optimistic heading into 2015”

After increasing its earnings guidance more than a couple of times in the year ended in January, L Brands Inc has ended projecting earnings for the current year below Wall Street estimates.

Profit this fiscal year will be something between 3.45 and 3.65 dollars a share, compared to the market average estimate of 3.84 dollars per share, as per data compiled by Bloomberg. Many in the market have understood this mismatch as a sign of that the company’s growth may be fading.

Management now anticipates earnings in the region of 50-55 cents for the first quarter and between 3.45 and 3.65 dollars per share for fiscal 2015. Analysts polled by Zacks had projected earnings of 62 cents and 3.80 dollars for the first quarter and fiscal 2015, respectively.

“We could witness a downtrend in the Zacks Consensus Estimate in the coming days,” advanced Zacks Equity Research in a note to clients.

Aware of this concern, Chief Executive Officer Les Wexner has been working to reinvigorate the retailer since sales stalled three years ago, reminds the ‘Wall Street Journal’. In fact, L Brands’ performance improved last year and the company is working to build on that, Wexner explained earlier this week.

“I am optimistic heading into 2015,” he said. “We have great brands, with talented associates at every level.”

L Brands benefited from cheaper fuel

On a positive note and according to Cowen Group retail analyst Oliver Chen, L Brands was amongst the retailer that benefited the most from lower fuel prices in the past months.

Chen highlighted that “It's been an exciting story, because intimate apparel is a great category to be in.”

“Also, a big theme for us is giving money back to shareholders – special dividends, free cash flow, repurchases. It's just a legendary team executing with very clean inventories,” added the analyst at Cowen Group.

L Brands posted fourth-quarter fiscal 2014 earnings of 1.89 dollars per share that surpassed the Zacks Consensus Estimate of 1.81 dollars and surged 15 percent from the year-ago quarter's earnings of 1.65 dollars, on the back of higher sales.

“Despite the earnings beat, shares fell 2.2 percent during after-market trading hours yesterday, as this specialty retailer of women's intimate and other apparel, provided a subdued outlook for the first quarter and fiscal 2015,” clarified the analysis team at Zacks.

The stock had gained 6.8 percent this year through the close of trading.