Limited Brands Inc.
), 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 four-week period ended May
26, 2012. The increase was boosted by healthy sales at its
Victoria's Secret Stores and Bath & Body Works.
The owner of Victoria's Secret Direct and La Senza chains has
sustained its growth momentum. Limited Brands' comparable-store
sales for May 2012 rose 6% following a similar percentage increase
in April 2012 and May 2011.
Management had earlier predicted comparable-store sales to rise
in the low single-digit range for the month under review. For June,
management now expects comparable-store sales to be in the flat to
low single-digit range.
Comparable-store sales for May increased 9% at Victoria's Secret
Stores & Victoria's Secret Beauty and 7% at Bath & Body
Works & The White Barn Candle Co. but fell 8% at La Senza.
Sales at Victoria's Secret Direct dropped 5%.
Limited Brands, which competes with
), said that net sales for May fell 6.3% to $671.9 million from
$717.4 million posted in the comparable prior-year month. The
prior-year period sales included $68.9 million from a third-party
apparel sourcing business that was sold in November
In terms of performance, Limited Brands fared far better than
), which posted acomparable-store sales increase of 2% compared
with a decline of 4% witnessed in the prior-year
For the 17-week period ended May 26, 2012, Limited Brands
registered comparable-store sales growth of 7%. However, net sales
for the period fell 3.7% to $2,826 million from $2,934 million in
the prior year. The prior-year sales included $282.8 million from a
third-party apparel sourcing business that was sold in November
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
Limited Brands wants 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 matters of concern.
Currently, we have a long-term Neutral recommendation on the
stock. However, Limited Brands holds a Zacks #3 Rank that
translates into a short-term Hold rating.
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