Based on Columbus, OH, L Brands (LB - Free Report) is a retail company with Victoria’s Secret, PINK, Bath & Body Works, La Senza, and Henri Bendel included in its brand portfolio. LB operates over 3,000 company-owned specialty stores throughout the U.S., Canada, the U.K., Ireland, and China, as well as more than 800 franchised locations worldwide.

The company recorded sales of $12.6 billion last year.

While LB managed solid holiday quarter numbers, it wasn’t enough to ease investor fears. The stock currently sits at a #5 (Strong Sell) on the Zacks Rank, and shares have continued to fall. Can the retailer turn things around?

Holiday Quarter Results

LB actually beat both top and bottom line estimates for its fourth quarter.

Earnings of $2.11 per share beat the Zacks Consensus of $2.04 per share, while revenues of $4.82 billion marginally came out ahead of our consensus estimate and grew 7.4% year-over-year.

Total comparable sales, including direct sales, were up 2% during Q4, but store-only comps fell 2% year-over-year.

Over at Victoria’s Secret, total sales rose 3.1% and comps fell 1%. Bath & Body Works’ total sales were up 10.7%, with a 6% rise in comparable sales.

Victoria’s Secret and Bath & Body Works International sales surged 37.2% to $170.3 million.

Fiscal 2018 Guidance

For 2018, management expects comps to increase in the 2-4% range, while sales are anticipated to be 2 points higher than comps. Gross margin rate is expected to remain flat compared with the prior-year period. 

The company also projects earnings in the band of $2.95-$3.25 per share compared with $3.20 last year.

Earnings Outlook

Despite these decent numbers, analysts were not impressed.

For the current quarter, seven analysts slashed their outlook in the last 60 days, and the consensus has dipped from $0.32 to $0.19 per share. Earnings are expected to decline about 42% for this time period.

11 analysts have revised their estimates downward for the current fiscal year, and the consensus has also fallen, declining 30 cents in the last 60 days.

While earnings are projected to grow in the next fiscal year too, and the current earnings consensus has dipped from $3.74 to $3.42 per share in the last 60 days.

What’s Next for L Brands?

Like many retailers, L Brands has struggled, and its product seems to be missing the mark the customers again and again. To make up for that, the company has doubled down on promotions to entice people back in its stores, hurting margins in return.

Shares are down about 37% so far this year and have declined over 20% in the last one year.

L Brands, Inc. Price and Consensus

L Brands, Inc. Price and Consensus | L Brands, Inc. Quote

The company is currently trading at a forward P/E of about 13X.

While it remains to be see if LB can successfully combat the changing retail landscape, the company still offers its investors a strong dividend yield of 6.26%.

For investors wanting a retail stock with more near-term potential, they should consider Urban Outfitters Inc. (URBN - Free Report) , the parent of Urban Outfitters, Anthropologie, and Free People. It’s a #2 (Buy) on the Zacks Rank right now and anticipates nearly 34% earnings growth for the current year, with 12 analysts revising their estimates upwards in the last 60 days.