(Reuters) - Shares of L Brands Inc (LB.N) hit their seven-year low on Thursday after the parent of Victoria’s Secret cut its full-year earnings forecast, blaming falling demand for its Pink line of lingerie.
The outlook cut hinted that PINK could be going down the same road as Victoria’s Secret, which has been losing customers as more women shift to cheaper bralettes and sports bras from companies such as American Eagle Outfitter’s (AEO.N) Aerie.
Pink was launched in 2002, targeting younger customers that the more high-end Victoria’s Secret, known for its splashy fashion shows and winged models, was failing to attract.
Shares of L Brands tumbled more than 10 percent to $28.61 in early trading. They have lost more than half their value since the beginning of the year.
L Brands cut its full-year earnings forecast to a range of $2.45 to $2.70 per share from a range of $2.70 to $3.00 estimated previously.
Analysts on average expected earnings of $2.69 per share in fiscal 2019, according to Thomson Reuters I/B/E/S.
Comparable sales at Victoria’s Secret, which also houses Pink, fell 1 percent in the second quarter, bigger than the 0.3 percent fall analysts had expected.
Victoria Secret is broken, and Pink is cracking and will not be a quick fix, Jefferies analyst Randal Konik said.
L Brands also said Pink Chief Executive Officer Denise Landman would retire at the end of the year and would be replaced by Bath & Body Works executive Amy Hauk.
Reporting by Uday Sampath in Bengaluru; Editing by Anil D'Silva