L Brands developing online and international business

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L BrandsĀ (LB), owner of Victoria’s Secret and Bath & Body Works, is a bargain with a PE of only 12.5. EPS are expected to fall by 20% this year as the company calls a halt to its catalogue business and shuts it swimwear lines but the company is investing in growth internationally and on line.

International and online sales have been growing by 10% and 20% respectively and that could ramp up as the company directs time and resources to these areas. China, where LB only has 33 stores, is a huge opportunity.

It is true that retailers are suffering. But for companies such as LB, with a no. 1 market leading brand, the potential to successfully develop direct online sales is much stronger than for general retailers. Add in huge international opportunities and LB’s valuation looks too cheap.

Risk Disclaimer: This article does not constitute a recommendation to buy or sell. Investing in stocks or other securities and derivatives is a high-risk activity and not suitable for everyone. It is strongly recommended that individuals should consult with a SEC-registered investment adviser prior to making any investment decisions.

Disclosure: The author holds no positions in any of the stocks mentioned nor has any intentions to initiate any in the next 72 hours.

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