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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