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L Brands, parent company of Victoria's Secret, nosedives pre-market after disappointing Q1 guidance

For the first quarter, it sees EPS of between 15 US cents and 20 US cents, reflecting a lower tax rate and an "incremental investment in wages and benefits," mainly for hourly employees, of about US$100mln

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L Brands shares dive in pre-market trade

The parent company of Victoria's Secret,  L Brands Inc.(NYSE:LB), failed to please investors despite market-beating fourth quarter profit, when it warned that first quarter profits could come in lower.

The retailer, in a statement, said that in the fourth quarter, it earned US$664mln, or US$2.33 a share, higher from the US$631mln or US$2.18 a share, recorded a year earlier.

READ: Victoria's Secret parent L Brands cuts guidance for fourth quarter earnings per share

Adjusted for one-time items, the company earned US$2.11 a share, up from US$2.03 a share a year ago.

In the quarter, sales rose to US$4.82bn from US$4.49bn a year ago.

The market consensus was for earnings of US$2.05 a share on sales of US$2.82bn.

The retailer sees full-year 2018 per-share earnings to come in between US$2.95 and US$3.25.

For the first quarter, it sees EPS of between 15 US cents and 20 US cents, reflecting a lower tax rate and an "incremental investment in wages and benefits," mainly for hourly employees, of about US$100mln.

However, this was far below the quarterly 31 US cents a share and full-year earnings of US$3.14 for 2018 expected by analysts.

In premarket, its shares were down 7.76% at US$45.52.

Quick facts: L Brands

Price: 30.1 USD

NYSE:LB
Market: NYSE
Market Cap: $8.36 billion
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