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Victoria's Secret: Stores Closing Amid Poor Holiday Sales

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Victoria's Secret

The parent company of Victoria's Secret is pulling itself up by the bootstraps after it met with bad sales during the holiday season, through the closing down of more than 50 underperforming outlets in North America.

L Brands stock had dropped nearly 9% Thursday after the parent company of Victoria's Secret beat fourth-quarter earnings forecasts, but offered below-consensus 2019 earnings guidance, and said it would stop reporting monthly sales.

In the earnings front, L Brands brought in net income of $540 million, or $194 per share, about $124 million, or 39 cents per share below its year-ago net income.

L Brands reported mixed results for its crucial fourth quarter amid falling sales at its embattled Victoria's Secret division.

LB stock was down about 0.3% during regular trading on Wednesday following a mixed quarter that saw Victoria's Secret underwhelm.

The company closed one Bath & Body Works in Canada in 2018 while opening another, and expects to open one more in Canada this year.

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Victoria's Secret's path to a turnaround looks challenging, too.

L Brands's chief financial officer Stuart Burgdoerfer said in an earnings call Thursday that the impending closings were triggered by Victoria's Secret "not meeting our expectations".

"It's an attractive category", Burgdoefer said of the lingerie business.

"People identify Victoria's Secret with what's it been for the last 20 years - very sexy and airbrushed models", she said.

Big retailers also threaten Victoria's Secret. "If they were going to pivot now, I don't think it would come off as authentic". Lululemon and Walmart have also expanded their efforts in the space. A list of the stores slated for closure has not been released.

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