Dive Brief:

• L Brands on Wednesday said in a press release that second quarter sales dropped to $2.90 billion from $2.98 billion in the year-ago quarter.

• Overall comparable sales (including e-commerce) fell 1% from a year ago, with Victoria's Secret comps falling 6% as Bath & Body Works comps rose 8%. In physical stores alone, overall L Brands comps fell 4% year over year, as Victoria's Secret tumbled 9% and Bath & Body Works rose 4%.

• Second quarter net income plummeted to $37.6 million from $99 million in the year-ago period, as operating income fell to $174.6 million from $228.1 million last year.

Dive Insight:

Victoria's Secret has responded to market demand for prettier, less sexy styles, and the brand maintains strong loyalty among many consumers. But it hasn't yet turned the page in a playbook that appears to be losing share.

"Among existing customers of Victoria's Secret, we believe the changes have been well received," GlobalData Retail Managing Director Neil Saunders said in emailed comments. "However, one of the issues is that some shoppers are still drifting away from the brand and, as of yet, Victoria's Secret has not won back much of the trade that it has lost over the past few years."

A failure in its brand message is a major problem, according to Saunders. Case in point, its annual fashion show, which L Brands has removed from network television but reportedly may still hold in some iteration, according to Women's Wear Daily. At least one Victoria's Secret model has said otherwise. 

"The lack of clarity about whether or not the show will go ahead underlines the fact that Victoria's Secret still doesn't have a clear view as to what it actually wants to stand for, let alone how it will go about executing such a change," Saunders warned. "Until such clarity emerges, we believe performance will continue to suffer. The brand is still not connecting and resonating with large swathes of its target market. Indeed, in our view, Victoria's Secret continues to be tarred with the negative connotations that surround its overt sexuality and its focus on airbrushed glamour."

The company could be in the early days of a new marketing strategy, in light of the departure of longtime marketing chief Ed Razek. He did little to further the lingerie brand's evolution in controversial comments last year about transgender models and about a digitally native lingerie brand stealing some of its sales. 

The brand has a new CEO as of early this year, John Mehas, formerly president of Tory Burch. He could perhaps find a clue to a Victoria's Secret transformation at L Brands' own Bath & Body Works unit, whose success Saunders says "stems from the fact that the team is much more attuned to the market and consumer trends than is the case at Victoria's Secret."

Bath & Body Works offers a broad range of products at affordable prices, with regular promotions (a signature of L Brands CEO Les Wexner). "The company's wholesome brand image and its focus on small indulgences is paying real dividends," according to Saunders.

The lingerie brand's woes, by contrast, are disconcerting analysts and investors. Moody's Investors Service earlier this year downgraded L Brand's outlook from "stable" to "negative," in part on concerns that Victoria's Secret's sales and profit "trends may remain weak," and that the company can ill afford any downward movement from its well-performing Bath & Body Works unit. In March, activist investor Barington Capital criticized L Brands' failure to update Victoria's Secret's merchandising and marketing as bad for business. 

L Brands pushed back on that, asserting in its reply that it "has made significant changes in its business to focus resources on core categories to enhance performance and accelerate growth," including offloading Henri Bendel and La Senza, and making management changes, among other moves.