In place of the tepid performance Wall Street analysts expected from Victoria's Secret parent L Brands (NYSE:LB), the previously troubled company reported strong third-quarter results yesterday after market close, shattering consensus expectations. As reported by Zacks Equity Research, actual earnings per share of $1.13 delivered a 1,783.3% positive surprise, massively beating the $0.06 EPS consensus. Revenue also topped predictions by 14.3%, coming in at $3.06 billion.

Analysts had already received hints of the coming rebound with the second quarter's 173.5% positive earnings surprise, but nevertheless remained pessimistic. L Brands' performance not only outpaced the pundits' predictions, but also yielded solid year-over-year growth. The adjusted earnings per share of $1.13 exceeded Q3 2019's $0.02 EPS. Comparable sales jumped 28% year over year, while overall net sales rose 14% from Q3 2019's $2.677 billion to this year's $3.055 billion.

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CEO Andrew Meslow remarked the growth was "driven by exceptional results and continued strength at Bath & Body Works, and a significant improvement in performance at Victoria's Secret." Bath & Body Works indeed produced explosive growth, with total sales rocketing 54.9% year over year. Victoria's Secret, though not losing ground as quickly as it did earlier in the year, still saw total sales shrink 14.2%.

One potentially significant detail of Victoria's Secret sales is that while brick-and-mortar sales dropped both in L Brands' U.S. and Canada and international sales segments, Victoria's Secret Direct -- the mail order and e-commerce branch of the brand -- saw sales boom 41.9% for the quarter, though this was not enough to counter the physical retail decline.

While L Brands no longer seems at risk of bankruptcy, Victoria's Secret continues to create headwinds for its otherwise remarkable turnaround. However, J.P. Morgan sees a potential 50% upside for the stock, and yesterday's upbeat report lends weight to the L Brands' bull case. 

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