LBrands does a GoBroke
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Lbrands the owner of Victorias secret, Pink, and bath and body works had a tough day today.
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Fucking now brands Oh brands really screwed us today guys. Oh my goodness, bad bad day here at Elle brands Elle brands did a go broke if you guys are not familiar with the term anytime a stock goes down double digits in a day we call it a go broke here on the channel, okay.
Elle brands did a go broke today today Elle brands is down over $4 a share down close to 12% as a taken this screenshot, just absolutely vicious, vicious, vicious day for all brands.
So what I want to do is I want to look at all the numbers across the board here with hellbrunn. I also want to go through in my buying more shares that I sell off my shares, am I gonna sell off my shares? Am I doing anything with options? I want to just cover all that today.
And let’s just get into this guy. So as far as the sales numbers, okay, in you, if you look at them, it doesn’t seem that bad, like up 3%. So this is a column store sales I’m showing you for the entire company, or just comes to the sales in general.
Okay, so what did sales do for the month of June, which is what the numbers they came out with today? Oh 3% All right, that’s versus the same month last year was actually down 9% It’s a big.
Big difference there guys, so it’s actually positive. Now Victoria’s Secret is the trouble spot. So Victoria’s Secret, negative 1%. sales numbers there for Victoria’s Secret for this month.
But that’s a massive improvement year over year. Look at last year, they had a negative 17% comp number like that’s insane guys, but at the same time, it is still negative. It’s 1%, negative bath and Bodyworks was up 10% comp store sales get bath and Bodyworks which is the business that’s on fire.
That’s just the profit engine for Elle brands right now. Great, great business. Okay, let’s look at these numbers a little further in depth here. So algorithms reported net sales increased 6% to 1.2 8 billion for the five weeks ended July 7 2018.
Compared to net sales of 1.2 1 billion for the five weeks ended July 1 2017. comparable sales for the five weeks ended July 7 2018. Increased 3% compared to the five weeks ended July 8 2017.
Okay, the company reported net sales of 4.7 billion for the 22 weeks ended July 7. So it’s taking you know, the whole year so far into account all of 2018 and E increase of 8% compared to net sales of 4.4 billion for the same time last year.
So it looks pretty good. Like the sales overall are positive. Okay, the Victoria’s Secret is still down 1%. But, you know, bath and Bodyworks is is unbelievable up 10%. But all the focus is strictly on Victoria’s Secret.
And everybody’s trying to kick a dog wise down right now. Okay, as you guys know that real quick, before we get into more of this, I’ve got into L brands because these are great brands, this company owns Lex Wexner, the guy in charge of this company.
He’s done a phenomenal job building the company over time, these shares have been beaten down so much that over the past few months, I kind of looked at this stock and I’m like, I got to start dipping my toes in here.
It makes sense it makes a value. But well, we’ll talk about that in just a second. So everything is just so negative. As far as the headlines go Elle brands tumbles after week sales at broken brand.
Victoria’s Secret, broken brand, they’re calling it it’s game over for Victoria’s Secret Jeffrey declares, okay, and analysts there, Victoria’s Secret can’t even sell its merchandise at a discount.
*Everybody’s trying to kick this dog whales down, man. Now, before we get into, you know what I’m doing in my cost basis and all that type of stuff. I just want to discuss something okay, what I believe Victoria’s Secret should do as far as you know.
The Elle brands owns many businesses, okay, Victoria’s Secret, they also own the pink business, they also own bath and Bodyworks. What I believe they should do with the Victoria’s Secret business is say screw all these comparable sales numbers screw trying to chase revenue numbers.
Because it’s not working screw trying to chase revenue numbers. It’s not working. It’s not working in the stocks perspective. And it’s not working for the overall business. Go after profit Victoria’s Secret if your revenue goes down 10% Who the hell cares.
Worry about the profit worry about the bottom line. Okay, net income is what matters in the end in this game. Okay, so in my opinion, the Victoria’s Secret side of Elle brands business is getting all the attention and regardless whether they have a negative 1% number, a positive 1% number or a negative 10% number.
Everybody hates the stock as it is right now it’s a 10 the 10 pe on this company are 1040 Okay, it’s so what if it’s if sold off more what’s it gonna go down to a seven four p who cares okay? It could be going there regardless.
So say screw chasing the revenue numbers forget that let’s go after profit. Okay, worry about the customers who were actually spending not trying to worry about trying to bring everybody through the doors screw revenue.
Screw comm store sales go after net income, take that focused approach. It reminds me so much of what happened to the purse companies a few years ago michael kors and coach okay these type of names Kate Spade, all these names.
They were high fliers they were high fliers they were doing huge numbers and then what ended up happening is they decided oh we’re gonna start going into discount mode they start discounting all their purses all their wallets everything they started you know.
If you went into a coach store or michael kors store they hand you about 50% off today 70% off today 80% off today oh we got this sale on top of this sale they were trying to get business any way they could okay and what end up happening 2015 2016.
These talks about absolutely killed because they ended up hurting their business and hurting their brands in the short term in a major major way and now that is 2018 and a lot of the stocks have recovered coaches.
Recovered a lot michael kors has recovered a lot they went after screw tried to chase revenue numbers we’re gonna go after net income numbers we’re going to go after profitability and that is exactly what they have done that’s exactly what those companies have done.
So Victoria’s Secret just quit chasing trying to chase the revenue left to the net income and go after the real money that’s where it’s at worry about brand worry about you know the brand prestige there and screw it if you’re if revenue goes down 10 15% who cares dude.
It doesn’t matter like any way the Victoria’s Secret went down 1% and the stock still got killed the day who cares the stocks gonna get killed regardless, it’s the way it is. Okay, so as far as my cost basis is on our brand so I we own in three different accounts.
So one of my accounts $35.10 cent cost basis so we’re down pretty significantly on that 132 12 and another count so that’s a round the you know where it’s trading at now and then my wife owns a significant portion and is around the same number there.
So as far as me with L brands, am I planning on buying any more selling off to the already sell off? No, I’m not planning on buying any more shares that not because I don’t believe in the business just I already have my stake built in this company. Okay.
I have already had my stake built in this company I have what I want in this company and it is what it is now I’m just holding Okay, am I going to sell off? Absolutely not do I want to sell off you know, at a company that’s trading at a forward p e of 10 that you know.
I think the Victoria’s Secret brand can be revived as long as they start you know focusing on the actual real customers that matter the company not trying to chase the ones that aren’t bringing in any business.
The bath and Bodyworks business is a phenomenal business that’s now their profit engine that has amazing growth going forward for the company it’s just the the company’s knocking the ball out of the park every single month.
So you know focus on that so I’m not selling off I’m not doing anything like that. Now as far as the dividend this company pays a massive massive dividend Okay, and I receive the dividend every three months.
So I just got the dividend let’s see I got that dividend I think was about a month ago they paid it out and I think it was like close to $1,000 worth of dividends I gotten that’s cool and that definitely adds to some you know helps out with the pain that the stock has gone down but at the same time.
I personally as a shareholder I’m okay if they cut that dividend and focus have more on the business I don’t need that dividend money I’d rather than focus on the business spend that money with the business build.
It back up and focus there and and build the balance sheet pay off some debt and do things like that rather than Hey, I don’t need this huge dividend they pay out it’s like over 6% yield.
I don’t need that I’d rather than focus on the business so we can get gains in the stock of 20 3040 50% over the next year or two rather than they pay out this dividend of 6% yield in the stock that goes nowhere like like I would rather than just focus that money on the stock one last thing.
I want to point out here before we end this video is this is exactly why I no longer go super heavy on stocks it’s something I very very valuable lesson I learned from the GoPro investment was not to go too heavy on stock Okay.
Regardless how confident you are in this company or whatever company you’re in, never go too heavy. So GoPro Wynn resorts you know, I went super heavy in those two stocks when it worked out great on GoPro didn’t but I was you know.
It just made me think like, what if when went bad that my account would have been completely devastated. So I used to go super heavy and a one or two stocks, I no longer do that. So a day like this, when l brands goes down, it’s still you know.
1000s and 1000s of 1000s of dollars of loss, but it’s not 10s of 1000s of dollars of loss if I went super heavy. This is why I no longer go you know super heavy stock. The most Algona stock now is like 20 30% and that of the total portfolio and that is it.
I’m not in I’m no longer interested in going 50 60% all in one stock. It’s just it’s I have too much my optics. It’s just it would be portfolio suicide when a situation like this happened. You say well, what if it went up a bunch? Oh, yeah, that’s great.
But at the same time, it’s about risk management, right? It’s not just about how much money you make. It’s about how much money you don’t lose, right? Okay, so you got to kind of balance those. So anyways, hope you guys enjoyed this.
I would love to hear your opinion on Elle brands. Do you think the company’s done? Do you think Victoria’s Secret business has done Do you think they should spin it off? What is your guy’s opinion on Elle brands is a stock you’ve bought or looking into or have thought about buying.
I would love to hear your guy’s opinion in that comment section. As always, thank you for watching. Have a great today.