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L Brands (LB) Strategic Efforts Bode Well: Should You Buy

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L Brands, Inc.’s (LB - Free Report) sustained focus on cost containment, inventory management, merchandise, and speed-to-market initiatives has kept it buoyant in a sluggish consumer environment. Moreover, the company’s operational efficiencies, together with its new and innovative collections, boosted sales. Further, the company’s foray into international markets is likely to provide long-term growth opportunities and generate increased sales volumes.

L Brands dominates in the lingerie, personal care and beauty segments. We believe that the company’s innovation in merchandise and exclusive assortments remain popular among consumers and sets it apart from its peers. L Brands with its operational efficiencies, new and innovative assortments remains well positioned to capitalize on the same.

L Brands continues to revamp its business by improving store experience, localizing assortments and improving its direct business. We believe these measures facilitate in generation of  incremental sales and increase store transactions through higher conversion rate. The company is repositioning its La Senza brand by focusing on the younger generation and providing fashionable assortments at a reasonable price. Moreover, in order to drive growth, it remains focused on adding the entire PINK and lingerie assortments at its Victoria’s Secret stores and seeks to expand in the adjacent categories.

Let’s look at the Zacks Rank #2 (Buy) company’s earnings estimate revisions in order to get a clear picture of what analysts are thinking about the company. In the past 60 days, the company’s earnings estimates for fiscal 2016 and fiscal 2017 have increased by 12 cents and 10 cents to $3.82 and $4.06, respectively.

Stocks to Consider

Stocks worth considering in the retail sector include Urban Outfitters Inc. (URBN - Free Report) , hhgregg, Inc. and American Eagle Outfitters, Inc. (AEO - Free Report) .

Urban Outfitters, which sports a Zacks Rank #1 (Strong Buy), has an impressive long-term earnings growth rate of 15%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hhgregg shares have gained more than 13% in the past three months and carry a Zacks Rank #2.

American Eagle Outfitters which has surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average earnings surprise of 9.3%, carries a Zacks Rank #2.

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