Limited Brands' Solid June Sales - Analyst Blog
July 09 2012 - 3:15AM
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
five-week period ended June 30, 2012. The increase resulted from
strong sales at its Victoria's Secret
Stores.
Limited Brands, owner of Victoria's
Secret Direct and La Senza chains, has sustained its growth
momentum. The company’s comparable-store sales for June 2012 rose
7% compared with a 12% increase in June 2011.
Comparable-store sales for June
increased 11% at Victoria’s Secret Stores & Victoria’s Secret
Beauty and 2% at Bath & Body Works & The White Barn Candle
Co. and at La Senza, respectively. Sales at Victoria’s Secret
Direct increased 11%.
Limited Brands, which competes with
Hanesbrands Inc. (HBI), announced that net sales
for June fell marginally to $1,077 million from $1,080 million
posted in the comparable prior-year month. The prior-year period
sales included $80 million from a third-party apparel sourcing
business that was sold in November 2011.
In terms of performance, Limited
Brands fared far better than its competitor Gap
Inc. (GPS), which posted a comparable-store sales increase
of 1%.
For the 22-week period ended June
30, 2012, Limited Brands registered comparable-store sales growth
of 7%. However, net sales for the period fell 2.8% to $3,903
million from $4,015 million in the prior-year period. The
prior-year sales included $362.9 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 intends 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 as well as 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. Limited Brands holds a Zacks
#3 Rank that translates into a short-term Hold rating.
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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