Ask a Fool: Victoria's Secret Still Too Sexy to Own?


In the latest installment of "Ask a Fool," Austin Smith responds to the question, "Is L Brands as overpriced as it seems?" In a word, no. Consider the company's flagship brand, Victoria's Secret. Same-store sales increased 3% in the past quarter, and that was on top of a previous year of excellent same-store-sales growth. The company earns 20% on invested capital and enjoys enviable sales per square foot in the retailing business. While the company sells at 20 times earnings, given that there's no real competition in sight and that L Brands has a big moat, Austin says that earnings multiple isn't all that bad.

See more in the following video.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only the most forward-looking and capable companies will survive, and they'll handsomely reward investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

The article Ask a Fool: Victoria's Secret Still Too Sexy to Own? originally appeared on

Austin Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published