LB LandBridge Company LLC

Limited Brands Inc. (LTD), a specialty retailer of women’s intimate and other apparel, beauty and personal care products recently posted healthy sales results for the four-week period ended May 28, 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 May 2011 rose 6%, following a 20% increase in April 2011, and compared with 5% growth posted in May 2010.

Comparable-store sales for May increased 8% at Victoria’s Secret Stores & Victoria’s Secret Beauty, break-even at Victoria’s Secret Direct, 4% at Bath & Body Works & The White Barn Candle Co. and 1% at La Senza.

Limited Brands, which competes with Gap Inc. (GPS) and Hanesbrands Inc. (HBI), said that net sales for May rose 9.1% to $717.4 million from $657.3 million posted in the same month last year.         

For the seventeen-week period ended May 28, 2011, comparable-store sales surged 13%, whereas net sales jumped 13.3% to $2,934 million from $2,589 million reported in the prior-year period.

Limited Brands’ sustained focus on cost containment, inventory management, and merchandise initiatives has helped it post healthy results. Management now forecasts fiscal 2011 earnings between $2.25 and $2.45 per 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 has 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. 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 #1 Rank, which translates into a short-term Strong Buy rating.

 
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