L Brands Inc (LB.N) on Tuesday forecast a smaller-than-expected drop in quarterly sales on strong demand for its Bath & Body Works hand sanitizers and other personal care products, and said it would cut 15% of its corporate staff.
Shares of the company surged 17% in extended trading after the Victoria’s Secret owner also said its cost-cutting efforts, including layoffs and inventory management, would help it save about $400 million annually.
L Brands is focusing on its high-margin Bath and Body Works division as the COVID-19 pandemic drives customers to stock up on personal care products such as hand sanitizers.
Columbus, Ohio-based L Brands estimated a 10% rise in second-quarter revenue for the brand, even as it expects total net sales to be down about 20% from a year earlier.
Analysts on average were expecting total net sales to decline about 35% to $1.9 billion, according to IBES data from Refinitiv.
“BBW is being helped by hand sanitizer while its candle sales slow. Sanitizer has been a lifesaver,” Jefferies analyst Randal Konik said.
The company projected a drop of about 40% in sales at its Victoria’s Secret unit, which it plans to run as a separate, standalone company after failing to sell a majority stake to private-equity firm Sycamore Partners.
L Brands has reopened most Bath & Body Works and Victoria’s Secret Stores in North America after the easing of coronavirus-induced lockdowns.
The company is expected to report results on Aug. 19.