Limited Brands Sales Up - Analyst Blog
May 09 2011 - 1:32PM
Zacks
Limited Brands Inc. (LTD), a specialty retailer
of women’s intimate and other apparel, beauty and personal care
products recently posted strong sales results for the four-week
period ended April 30, 2011 on the heels of healthy sales at its
Victoria's Secret Stores and Bath and Body Works.
The owner of Victoria's Secret and La Senza chains sustained its
growth momentum. Limited Brands’ comparable-store sales for April
2011 rose 20%, following a 14% increase in March 2011, and compared
with 4% growth posted in March 2010.
Comparable-store sales for April increased 25% at Victoria’s
Secret Stores & Victoria’s Secret Beauty, 5% at Victoria’s
Secret Direct and 16% at Bath & Body Works & The White Barn
Candle Co. but decreased marginally by 1% at La Senza.
Limited Brands, which competes with Gap Inc.
(GPS) and Hanesbrands Inc. (HBI), said that net
sales for April rose 16.9% to $683.2 million from $584.6 million
posted in the same month last year.
For the thirteen-week period ended April 30, 2011,
comparable-store sales surged 15%, whereas net sales jumped 14.8%
to $2,217 million from $1,932 million reported in the prior-year
period.
On the back of better-than-expected sales results for the month
of April, Limited Brands raised its earnings outlook. Management
now expects first-quarter 2011 earnings between 37 cents to 39
cents a share, reflecting a year-over-year growth of 48% to 56%.
Earlier, management had earnings in the range of 26 cents to 31
cents a share.
The company’s Bath & Body Works segment is gaining traction,
driven by a rise in store transactions, enhancement in the direct
channel business and growth in new stores.
Victoria’s Secret Stores have been performing well, and the
company is also revamping its La Senza brand.
Limited Brands is keen to enhance its retail footprint across
the globe by expanding aggressively in Canada and other
international markets. Moreover, the company’s strong liquidity
positions it to drive growth and enhance return.
After exhausting the $500 million
share buyback program announced on March 22, 2011, Limited Brands’
board of directors announced another $500 million share repurchase
program. However, stiff competition and erratic consumer behavior
still remain concerns.
Currently, we have a long-term Neutral recommendation on the
stock. However, Limited Brands holds a Zacks #2 Rank, which
translates into a short-term Buy rating.
GAP INC (GPS): Free Stock Analysis Report
HANESBRANDS INC (HBI): Free Stock Analysis Report
LIMITED INC (LTD): Free Stock Analysis Report
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