Limited Brands Sales Rise - Analyst Blog
January 09 2012 - 9:36AM
Zacks
December being the busiest gift-giving time of the year is also
the most crucial month for retailers, and Limited Brands
Inc. (LTD), a specialty retailer of women’s intimate and
other apparel, beauty and personal care products, has made the most
of it this time.
The company posted better-than-expected sales results for the
five-week period ended December 31, 2011 on the heels of healthy
sales at its Victoria's Secret Stores and Bath & Body Works,
and consequently, raised its fourth-quarter 2011 earnings
outlook.
The owner of Victoria's Secret Direct and La
Senza chains
has sustained its growth momentum. Limited Brands’ comparable-store
sales for December 2011 rose 7% following a similar increase in
November 2011 and compared with a 5% jump in December 2010.
Comparable-store sales for December increased 11% at Victoria’s
Secret Stores & Victoria’s Secret Beauty and 4% at Bath &
Body Works & The White Barn Candle Co. but remained flat at La
Senza. Sales
at Victoria’s Secret Direct climbed 6%.
Limited Brands, which competes with
Hanesbrands Inc. (HBI), said that net sales for December
jumped 4.4% to $1,868 million from $1,790 million posted in the
same month of the prior year.
For the 48-week period ended December 31, 2011, comparable-store
sales surged 10%, whereas net sales jumped 8.5% to $9,590 million
from $8,841 million reported in the prior-year period.
Buoyed by better-than-expected sales results, management now
projects fourth-quarter 2011 earnings in the range of $1.42 to
$1.46 per share, up from $1.28 to $1.43 forecast earlier. The
current Zacks
Consensus Estimate for the quarter is $1.44.
In terms of performance, Gap Inc. (GPS) lagged
behind Limited Brands, posting comparable-store sales decline of 4%
compared with a 2% fall in the prior-year period.
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 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 augment 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
concerns.
The economy is still grappling with the ongoing financial
crisis. Although, the recent drop in the unemployment rate to 8.5%
in December compared with 8.7% in November and 9.4% in the prior
year, is encouraging, but we still expect consumers to remain
cautious on their spending, and retailers to make relentless
efforts to convert store traffic into business.
Currently, we have a long-term Neutral recommendation on the
stock. Moreover, Limited Brands holds a Zacks #3 Rank that translates into
a short-term Hold rating, and correlates with our long-term
view.
GAP INC (GPS): Free Stock Analysis Report
HANESBRANDS INC (HBI): Free Stock Analysis Report
LIMITED BRANDS (LTD): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
LandBridge (NYSE:LB)
Historical Stock Chart
From Jun 2024 to Jul 2024
LandBridge (NYSE:LB)
Historical Stock Chart
From Jul 2023 to Jul 2024