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Hell 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 the day we call it a go broke here on the channel okay elle brands did a go broke today today elgrands is down over $4 or share down close to 12% as
I’ve taken this screenshot just absolutely vicious vicious vicious day for all grams so what i want to do is i want to look at all the numbers across the board here with all brands i also want to go through am i buying more shares that i sell off my shares i might 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 likes up three percent so these are common store sales i’m showing you for the entire company or just comps 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 up three
Percent alright that’s versus the same month last year was actually down nine percent it’s a big big difference there guys so it’s actually positive now victoria’s secret is the trouble spot so a victoria’s secret negative one percent sales numbers therefore victoria’s secret for this month but that’s a massive improvement year-over-year look at last year they
Had a negative seventeen percent complex insane guys but at the same time it is still negative it’s one percent negative bath and bodyworks was up 10 percent comp store sales get bath and bodyworks was just a business that’s on fire and 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 one point two eight billion for the five weeks and at july 7 2000 18 compared to net sales of 1.2 1 billion for the five weeks ended july 1st 2017 comparable sales for the five weeks end of july 7 2000 18 increased three percent compared to the five weeks end at july 8 2017 ok the company reported
Net sales of four point seven billion for twenty two weeks and at july 7 so that’s taken you know the whole year so far into account all of 2018 and he increase up eight percent 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 one percent but you
Know bath and bodyworks which is unbelievable up ten percent but all the focus is strictly on victoria’s secret and everybody’s trying to kick a dog weis down right now okay as you guys know that real quick before we get into more of this i’ve gotten into l brands because these are great brands as 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 gotta start dipping my toes in here and it makes sense and make some value but we’ll talk about that in just a second so everything it’s just so negative as far as the headlines go elbrun stumbles
After week sales at broken brand victoria’s secret broken brand they’re calling it it’s game over for victoria’s secret jeffery declares okay and analysts they’re victoria’s secret can’t even sell its merchandise at a discount everybody’s trying to kick this dog wiles down man now before we get into you know what i’m doing and 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 l brands owns many businesses okay victoria’s secret they also in the pink business they also own bath & body works 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 those 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 up of 1% number or a negative 10% number everybody hates the stock as it is right now it’s at a 10 10 pe on this company or 10 4 p okay it’s so what if it sells off more what’s it gonna go down
To a 7 4 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 door screw revenue screw comp 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 in coats okay these type of names kate spade all these names they were high flyers they were high flyers that were doing huge numbers and then what ended up happening is they decided all we’re gonna start going into discount mode they started discounting all their purses all their wallets
Everything they started you know if you would into a coach store michael chorost or 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 ended up happening 2015 2016 these stocks got absolutely killed because they ended up hurting their business and
Hurting their brands in the short term in a major major way and now there is 2018 and a lot of these stocks have recovered coaches recover a lot michael kors has recovered a lot they went after we screwed trying to chase revenue numbers we’re gonna go after net income numbers we’re gonna 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 them trying to chase some revenue go after 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 ten fifteen percent who cares do it it doesn’t matter like anyway the victoria’s
Secret went down one percent and the stock still got killed today who cares the stocks going to get killed regardless it’s the way it is okay so as far as about cost basis is on elgrand so i we don’t in three different accounts so one of my accounts $35 $0.10 cost basis so we’re down pretty significantly on that 132 12 and another account so that’s around the you
Know where it’s trading at now and then my wife owns a significant portion and it’s around the same number there so as far as me with elgrands am i planning on buying anymore selling off did i already so often know 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 it okay am i going to sell off absolutely not do i want to sell off you know what a company that’s trading at a forward p/e of 10 that you know i think this 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 & 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 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 gonna 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 got that’s cool and that
Definitely adds to something you know helps out with the pain that the stock has gone down but at the same time ah personally as a shareholder i’m okay if they cut that dividend and focus that more on the business like i don’t need that dividend money i’d rather than focus on the business spend that money with their business build it back up and focus there and
Build the balance sheet you pay off some debt and do things like that rather than pay me i don’t need this huge dividend they payout it’s like over six percent yield i don’t need that i’d rather than focus on the business so we can get gains in the stock of twenty thirty forty fifty percent over the next year – rather than they pout this dividend of six percent
Yield in the stock doubt that goes nowhere like like i would rather then 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 is something i a very very valuable lesson i learned from the gopro investment was not to go too heavy in a stock okay regardless
How confident you are in this company or whatever company you’re in never go too heavy so gopro and 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 wynn went bad that my account would have been completely devastated so i used to go super heavy into one or
Two stocks i no longer do that so a day like this when elgrands goes down it’s still a you know thousands and thousands of thousands of dollars of loss but it’s not tens of thousands of dollars of loss if i went super heavy this is why i no longer go you know super heavy in stock the most i’ll go on a stock now is like twenty thirty percent in that of the total
Portfolio and that is it i’m not and i’m no longer interesting going 50 60 percent all in one stock is just it’s i have too much money 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 enjoy this i would love to hear your opinion on el brands do you think the company’s done do you think victoria’s secret business is done do you think they should spin it off what do you guys opinion on el brands is a stock you’ve bought or looking
Into or have thought about buying i would love to hear you guys opinion in that comment section as always thank you for watching have a great day
Transcribed from video
LBrands does a GoBroke By Financial Education