The lingerie seller, which has struggled to pull out of a sales slump, just posted its second straight quarter of declines in its undies business, Jefferies analyst Randal Konik noted.

Before the latest downturn, the category hadn't suffered a drop since 2009, when the recession hurt demand for high-end underwear.

"While management had suggested this category would see a quick fix, we expect the problems to be longer lasting," Konik said in a note.

L Brands, which owns Victoria's Secret, is trying to revamp how it sells undies. Previously, underwear was used as a promotion to get shoppers into stores, where they would then buy more expensive items like push-up bras or sportswear.

When Jan Singer took over as chief executive officer of Victoria's Secret in September 2016, she pledged to turn undies into a thriving business on their own, rather than "just a marketing tool."

But investors are showing signs of unease. Shares of L Brands fell as much as 5.3 per cent to $US46.65 in New York on Thursday, the biggest drop intraday in almost two months. The stock had already plunged 25 per cent this year.

Retailers have struggled with intensifying competition this year, especially in the apparel category, as shoppers migrate to online stores and jump from one fashion trend to another faster than ever, often leaving companies flat-footed.

L Brands has now reported flat or declining same-store sales for four consecutive quarters.

Singer is trying to reset the company's "panty architecture" by embracing a fast-fashion model, where styles are updated frequently. L Brands is also promoting "elevated panties," which are more expensive. Singer is still confident her vision will succeed.

"We've been deep into this since I've arrived," Singer said on the company's earnings call on Thursday. "We've dissected the business."

Bloomberg