What happened

Stock in specialty retailer L Brands, Inc. (NYSE:LB) gained 30.3% last month, according to data from S&P Global Market Intelligence.

So what

Shares enjoyed a boost on the first day of the month when L Brands revealed in its monthly sales report that third-quarter 2017 earnings per share would reach the high end of its previously guided range of $0.25 to $0.30 per share. When released on Nov. 15, earnings indeed hit $0.30 per share for the quarter.

During the third quarter, revenue increased 1%, and comparable sales decreased by 1% versus the prior-year comparable quarter. Last year, L Brands made a strategic decision to exit swimwear and apparel within its Victoria's Secret segment. The exit impacted comparable sales negatively by 2% in the third quarter, meaning that the company achieved slightly positive "comps" of 1% when adjusting for the discontinued lines. 

The company's third-quarter report showed continued strength in the Bath & Body Works segment, which expanded sales by 6% to $815 million. This personal care products segment, the company's second-largest business after Victoria's Secret, has improved its top line by 5.4% during the first three quarters of 2017. That amounts to $122 million in additional sales over the prior year, which has partially offset a $474 million decline in Victoria's Secret's year-to-date revenue.

In its earnings conference call, management relayed that the company expects a reasonably successful holiday season, which will be characterized by margin discipline around a slate of planned promotional activity. 

Wedge-shaped exterior building lit at twilight.

Victoria's Secret New Bond Street location, London. Image source: L Brands, Inc.

Now what

Since the summer, L Brands has slowly climbed out of a stock price trough, assisted by improved earnings prospects.

LB Total Return Price Chart

LB total return price. Data by YCharts.

While brick-and-mortar retailers still feel significant industry pressure, L Brands shareholders are starting to grasp that the company's revenue woes aren't excessively dire. And a few bright spots could potentially spark future growth, including direct-to-customer sales, which expanded by 22% to $309.6 million in the Bath & Body Works segment during the first nine months of the year. Renewed shareholder confidence and general interest in beaten-down retail stocks may lead to a healthier stock chart for L Brand shares in 2018.

Asit Sharma has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.