L Brands shares tumbled after-hours on Wednesday after the company behind Victoria’s Secret and Bath & Body Works issued a disappointing outlook for the current quarter.

The Ohio-based retailer’s shares fell more than 10 per cent after it said it now expects to earn between 15 to 20 cents a share in the fiscal first quarter that is currently under way. That missed analysts’ estimates for 31 cents a share.

For the full year the company expects earnings in the range of $2.95 to $3.25 a share. “This forecast reflects the benefit of a lower tax rate due to tax reform legislation and an incremental investment in wages and benefits, principally for hourly associates, of approximately $100 million,” the company said.

Despite the dim view the company reported better than expected fourth quarter sales. Net sales rose 7.4 per cent from a year ago to $4.8bn, however the period included an extra week when compared to the year ago quarter, which represented about $160m in sales. That topped analysts estimates for revenue of $4.7bn.

That came as comparable sales, a key sales metric, rose 2 per cent — including a 1 per cent decline at Victoria’s Secret and a 6 per cent increase at Bath & Body Works.

Meanwhile, net income climbed to $664.1m or $2.33 a share, compared with $631.7m or $2.18 a share in the year ago quarter. The extra week translated to earnings of 10 cents a share. L Brands also reported a tax benefit of $92.2m or 32 cents a share following the enactment of the US Tax Cut and Jobs Act in December.

Adjusting for one-time items, earnings of $2.11 a share topped analysts’ view of $2.05.

The once high-flying brand has struggled in recent years amid mounting competition from the likes of American Eagle Outfitters’ Aerie brand, Gap and Lululemon in the lingerie space. The discontinuation of the Victoria’s Secret catalogue aimed at lowering costs and the company’s decision to stop selling swimwear, clothes and accessories have also weighed on its business.

L Brands shares are down 18 per cent year-to-date following an 8 per cent decline last year.

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