L Brands Gains on Higher Comps - Analyst Blog


Shares of L Brands, Inc. ( LB ) rose 5.4% following impressive comparable-store sales performance for the month of January that bettered analysts' expectation. After a 2% increase registered in December, comps of this specialty retailer of women's intimate and other apparel rose 9% for the four-week period ended Feb 1, 2014.

However, net sales of this Zacks Rank #5 (Strong Sell) stock witnessed a sharp drop of 25.9% to $731.2 million from $986.4 million in the prior-year period.

The holiday season was a tough one, while some make their way out, others struggled to lure budget-constrained consumers. Consumer spending environment was not very convincing, and bargain hunters went from one shop to another to grab the best deal. After a dismal holiday season, severe weather conditions dampened consumers' spirit and restrained them from mall visits. Despite these challenges, L Brands managed to deliver healthy comps.

Other retailers that performed surprisingly well include Costco Wholesale Corporation ( COST ), Walgreen Co. ( WAG ) and The Gap, Inc. ( GPS ) posting comparable-store sales growth of 4%, 2.9% and 1%, respectively.

Coming to Limited Brands, comparable-store sales for January grew 10% at Victoria's Secret Stores & Victoria's Secret Beauty, 6% at Bath & Body Works & The White Barn Candle Co. and 4% at La Senza. However, sales declined 12% at Victoria's Secret Direct.

For the 13-week period ended Feb 1, comparable-store sales climbed 1% compared with the 5% jump experienced in the prior-year period. Net sales for the period grew 1% to $3,818 million from $3,856 million in the year-ago period.

Management now projects total comparable-store sales ranging from flat to the low-single-digits for February.

Limited Brands, which is slated to release fourth-quarter fiscal 2013 results after the market closes on Feb 26, now projects earnings to be marginally ahead of its earlier provided guidance of $1.60 per share. The current Zacks Consensus Estimate for the quarter is $1.61.

The company currently operates about 2,923 stores.

COSTCO WHOLE CP (COST): Free Stock Analysis Report

GAP INC (GPS): Free Stock Analysis Report

L BRANDS INC (LB): Free Stock Analysis Report

WALGREEN CO (WAG): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: COST , GPS , LB , WAG



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