A customer carries a shopping bag as he leaves a store of Victoria’s Secret Stores LLC, a subsidiary of L Brands Inc., in New York, United States, on Wednesday, November 14, 2018.

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Victoria’s secret parent company, L Brands, reported a fourth quarter profit on Wednesday that exceeded analysts’ estimates. However, sales declined due to the lingerie brand’s weakness.

Although the retailer does not offer a full-year outlook due to the uncertainty surrounding the pandemic and the impending separation of its Victoria’s Secret brand from Bath & Body Works, it did announce an bullish earnings outlook for the first quarter on the momentum it will see over the holidays saw. In February sales have been strong so far.

L Brands shares rose roughly 5% in after-hours trading.

Here’s how the company performed in the fourth quarter ended January 30, compared to analyst expectations based on refinitive data:

  • Earnings per share: $ 3.03 versus $ 2.91 expected
  • Revenue: $ 4.82 billion versus $ 4.87 billion expected

L Brands posted net income of $ 860.3 million, or $ 3.03 per share, compared to a loss of $ 192.3 million, or 70 cents per share, last year. The results surpassed analysts’ forecast of $ 2.91 per share.

Net sales increased from $ 4.71 billion a year ago to $ 4.82 billion. That didn’t match what analysts had expected to be $ 4.87 billion.

Sales in the same store rose 10%, above the 6.7% increase predicted by a refinitive survey. Over that period, Victoria’s Secret sales in the same store decreased 3%, but the decrease was offset by 22% sales growth in the same store at Bath & Body Works.

The company has managed to increase its profitability by lowering inventory levels and selling more items at full price. L Brands relied less on discounts to attract customers and saw a significant improvement in both average unit prices and merchandise margins in the fourth quarter.

For the first quarter, L Brands is asking for earnings per share between 35 and 45 cents. This is way ahead of the analysts’ estimates for 12 cents per share.

For the first quarter, revenue is expected to be $ 2.6 billion compared to 2019. Here, too, Bath & Body Works will see stronger growth, while sales at Victoria’s Secret remain under pressure due to, among other things, ongoing store closures.

Management also said in prepared remarks on Wednesday that L Brands is continuing its plans to separate Victoria’s Secret from Bath & Body Works, which are expected to be completed by August.

“We will continue to work towards separating the two companies over the next 6 months and will take two paths to prepare for either a spin-off or a sale,” the company said.

L Brands signed a deal last year to sell Victoria’s Secret to private equity firm Sycamore Partners. However, the $ 525 million deal fell apart when the pandemic temporarily closed the retailer’s brick and mortar stores.

Victoria’s Secret has tried to revitalize its brand, which sells everything from lingerie and perfumes to pajamas and lounge wear, as consumers increasingly turned to bras and underwear with broader marketing messages.

L Brands will host a conference call with analysts Thursday morning to discuss the latest results.

Shares were up 119% over the past 12 months as of the market close on Wednesday. L Brands has a market capitalization of $ 14.36 billion.

The full press release from L Brands can be found here.