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(Reuters) – L Brands Inc (LB.N) cut its dividend by half and appointed a new general manager for its Victoria's Secret lingerie brand, dropping the shares of this clothing retailer down 6%.
A customer walks past a L Brands Inc. store, the Victoria's Secret retail store, in Manhattan, New York, United States, on May 13, 2016. REUTERS / Brendan McDermid
The company, which posted better than expected results for the third quarter, reduced its annual ordinary dividend from $ 2.40 to $ 1.20.
L Brands has appointed John Mehas as CEO of Victoria's Secret, replacing Jan Singer.
Mehas joins the lifestyle brand Tory Burch at Victoria's Secret and previously worked with Polo Ralph Lauren's Monaco, Gap and Bloomingdales clubs.
L Brands said sales in its established stores had increased 4% in the quarter ended Nov. 3, exceeding the average analyst estimate of 1.53%, according to Refinitiv's IBES data.
Bath and Body Works, which makes perfumes and body care products, posted a 13% increase in sales per store, exceeding estimates by 8.3%.
At Victoria's Secret stores, which have been open for at least a year, sales have dropped 2%, but are above the analyst average of 4%.
The company also raised its earnings guidance for the full year of 2018 from $ 2.45 to $ 2.70 per share, from $ 2.60 to $ 2.80 per share, its first increase after a reduction of the two previous quarters.
Excluding items, L Brands gained 16 cents per share, 1 cent higher than Wall Street estimates.
Net sales increased 6% to $ 2.77 billion, also exceeding estimates.
The company recorded a net loss of $ 42.8 million, or 16 cents per share, compared to a profit of $ 86 million, or 30 cents a share, a year earlier.
The loss is mainly attributable to charges of $ 101.2 million related to an already announced plan to close its Henri Bendel stores and certain Victoria's Secret stores.
Report by Nivedita Balu in Bengaluru; Edited by Maju Samuel
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