Victoria’s Secret Parent Allegedly Misled Investors on Cash Flow

L Brands Inc. wasn’t honest with investors about cash flow problems stemming from slow sales from its subsidiary Victoria’s Secret, a complaint alleges.

Analysts asked L Brands about the problems at Victoria’s Secret and sister store PINK in 2018, but the company assured investors it “had sufficient cash flow and cash on hand to sustain its dividends,” the complaint filed in the U.S. District Court for the Southern District of Ohio says. But the company announced plans to cut its dividend in half shortly after, the complaint filed July 23 says.

L Brands’s common stock price fell $6.12—around 18%—after the ...