How Much Will L Brands’ Revenue Grow in the Next 2 Years?

by Trefis Team
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L Brands
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L Brands (NYSE: LB) has seen decent growth in sales and steady profits the past several years. During the latest quarter, net sales of the company rose to $2.77 billion, compared with $2.61 billion a year ago, up 6% from the prior-year quarter, with adjusted earnings per share at $0.30. This was driven by growth across its Bath and Body Works segment, a well-positioned customer strategy, international diversification, and rising online sales. L Brands has been continuously revamping business by improving the store experience, localizing assortments, and enhancing direct business. These measures have facilitated it to generate incremental sales and increase store transactions through higher conversion rates.  A sustained focus on cost containment, inventory management, merchandise, and speed-to-market initiatives has kept L Brands afloat in a competitive environment. Also, L Brands is seeing very strong momentum in online sales growth with online revenue for VS and Bath & Body Works going up.

Going forward, we are projecting revenues for all the 4 segments of the Company to grow as the company is working on developing their long-term strategic plan for sustainable growth. Overall, we anticipate the company’s revenue to grow at a compound annual growth rate (CAGR) of 3.8%. We have built an explanatory dashboard for L Brands Inc’s Growth in the Next 2 Years to outline major drivers of revenue over the next two years.

Estimating L Brands Inc Revenue Growth

Total revenue for L Brands is comprised of  Victoria’s Secret Segment, Bath & Body Works Segment, Victoria’s Secret and Bath & Body Works International and Others Segment.

These 4 segments are expected to continue to drive future revenue and profitability growth for the company, in line with the guidance provided by the company, where VS the segment will continue to be the major contributor to its top line growth. The company is focused on improving performance in the Victoria’s Secret business, staying close to its customer, improving the customer experience in stores and online, and improving assortments in compelling new product launches with steadier footing in the remainder of FY2018.

The Company is more than ever focused on execution, ongoing improvements in top-line growth, and continuing actions to expand margins and accelerating their strengths to create more value for their consumers, customers,  colleagues, and shareholders. The company plans to grow their business through continuous improvement and sustain their profitability. All these factors, coupled with strong sales momentum, will enable L Brands Inc to continue to grow its top line.  Our detailed estimates have been highlighted in our dashboard above. You can make changes to our assumed figures to arrive at your own revenue and growth estimates for the company.

 

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