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
August 25, 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 August 2012 rose 8% following an increase of 12% in July
2012 and 11% in August 2011. For September, management expects
comparable-store sales to be in the low single-digit range.
Comparable-store sales for August increased 9% at Victoria's
Secret Stores & Victoria's Secret Beauty and 6% at Bath &
Body Works & The White Barn Candle Co. but remained flat at La
Senza. Sales at Victoria's Secret Direct inched up
Limited Brands, which competes with
), said that net sales for August fell 5.2% to $665.6 million from
$702.4 million posted in the comparable prior-year month. The
prior-year period sales included $87.8 million from a third-party
apparel sourcing business that was sold in November
In terms of performance, Limited Brands marginally lagged its
), which posted a comparable-store sales growth of 9% compared with
a decline of 6% witnessed in the prior-year period.
For the 30-week period ended August 25, 2012, Limited Brands
registered comparable-store sales growth of 8%. However, net sales
for the period fell 3% to $5,218 million from $5,378 million in the
prior-year period. The prior-year sales included $518.3 million
from a third-party apparel sourcing business that was sold in
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 is keen on augmenting 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
Currently, we have a long-term Neutral recommendation on the
stock. However, Limited Brands holds a Zacks #2 Rank that
translates into a short-term Buy rating, and well defines the
company's upbeat guidance for fiscal 2012.
Management now expects earnings in the range of 15 cents to 20
cents for the third quarter and between $2.73 and $2.88 per share
for fiscal 2012, up from its previous guidance range of $2.63 to
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