In general, investors have been forgiving of those retailers who have reported poor earnings performances after their stores were forced to close during the coronavirus pandemic.

What is more surprising are the results of retailers like L Brands (NYSE:LB), which just reported strong second-quarter earnings that make it almost seem as if the COVID-19 outbreak had little impact.

Bath & Body Works store

Image source: L Brands.

Making lemonade out of lemons

Of course, the crisis did harm L Brands beyond just impeding sales at its stores, with revenue falling 20% in the second quarter. The retailer's plan to sell a 55% stake in its Victoria's Secret chain to Sycamore Partners for $525 million fell apart after the private equity firm alleged L Brands violated the terms of the purchase agreement by closing stores and furloughing workers.

Although the retailer had a seemingly strong case to force the sale in court, it let Sycamore Partners off the hook without penalty and instead is pursuing a plan to separate the lingerie business from its Bath & Body Works chain.

The pandemic showed the mettle of Bath & Body Works, with its outsized performance causing Wall Street to heap superlatives on its business as being "among the strongest in the retail sector."

In the second quarter, Bath & Body Works comparable store sales surged 87% year over year for the time they were open, helping L Brands stock to nearly quadruple in value from the lows hit back in March.

Even an investor who put $10,000 into L Brands stock back on Jan. 1 would be sitting on a nice profit of $6,500 today. Had they the foresight to invest in the retailer's stock on the market's March 23 bottom, that $10,000 would be worth $32,600 today.

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