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Fly News Breaks for January 9, 2020
LB
Jan 9, 2020 | 09:49 EDT
After L Brands reported comparable sales decreased 3% for the nine weeks ended Jan. 4 and cut its fourth quarter EPS view to about $1.85 from $2.00, Jefferies analyst Randal Konik advised investors to "sell now" and lowered his price target to $12 from $14 while maintaining his long-held Underperform rating on the shares. Victoria's Secret comps being down 12% show the brand is worsening and underlying demand is very soft, leading him to conclude that the "brand is becoming irrelevant." Pink comps are "even worse" and the brand is "broken," according to the analyst. While he thinks bulls will like the strong Bath and Body Works comp growth of 9%, Konik points to margin deterioration as a sign that the brand's demand and traffic is becoming more volatile.
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