Limited Brands Comps Rise - Analyst Blog
September 04 2012 - 2:08PM
Zacks
Limited Brands Inc. (LTD), a specialty retailer
of women’s intimate and other apparel, beauty and personal care
products, posted better-than-expected comparable-store sales
results for the four-week period ended August 25, 2012. The
increase was boosted by healthy sales at its Victoria's Secret
Stores and Bath & Body Works.
The owner of Victoria's Secret Direct and La Senza chains has
sustained its growth momentum. Limited Brands’ comparable-store
sales for August 2012 rose 8% following an increase of 12% in July
2012 and 11% in August 2011. For September, management expects
comparable-store sales to be in the low single-digit range.
Comparable-store sales for August increased 9% at Victoria’s
Secret Stores & Victoria’s Secret Beauty and 6% at Bath &
Body Works & The White Barn Candle Co. but remained flat at La
Senza. Sales at Victoria’s Secret Direct inched up
1%.
Limited Brands, which competes with Hanesbrands
Inc. (HBI), said that net sales for August fell 5.2% to
$665.6 million from $702.4 million posted in the comparable
prior-year month. The prior-year period sales included $87.8
million from a third-party apparel sourcing business that was sold
in November 2011.
In terms of performance, Limited Brands marginally lagged its
competitor Gap Inc. (GPS), which posted a
comparable-store sales growth of 9% compared with a decline of 6%
witnessed in the prior-year period.
For the 30-week period ended August 25, 2012, Limited Brands
registered comparable-store sales growth of 8%. However, net sales
for the period fell 3% to $5,218 million from $5,378 million in the
prior-year period. The prior-year sales included $518.3 million
from a third-party apparel sourcing business that was sold in
November 2011.
Let’s Conclude
The company’s Bath & Body Works segment is gaining traction,
driven by a rise in store transactions, enhancement in the direct
channel business and new stores. Victoria’s Secret Stores have been
performing well, and the company is also revamping its La Senza
brand.
Limited Brands is keen on augmenting its retail footprint across
the globe by expanding aggressively in Canada and other
international markets. Moreover, the company’s strong liquidity
positions it for growth and higher returns. However, stiff
competition and erratic consumer behavior still remain matters of
concern.
Currently, we have a long-term Neutral recommendation on the
stock. However, Limited Brands holds a Zacks #2 Rank that
translates into a short-term Buy rating, and well defines the
company’s upbeat guidance for fiscal 2012.
Management now expects earnings in the range of 15 cents to 20
cents for the third quarter and between $2.73 and $2.88 per share
for fiscal 2012, up from its previous guidance range of $2.63 to
$2.83.
GAP INC (GPS): Free Stock Analysis Report
HANESBRANDS INC (HBI): Free Stock Analysis Report
LIMITED BRANDS (LTD): Free Stock Analysis Report
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