Limited Brands Inc.
), a specialty retailer of women's intimate and other apparel,
beauty and personal care products, posted comparable-store sales
growth of 3% for the five-week period ended December 29, 2012,
but fell short of analysts' expectations. The owner of Victoria's
Secret Direct and La Senza chains succumbed to the economic
impasse, which dampened the enthusiasm from the holiday
We observed that the rate of growth in comps also decelerated
from an increase of 5% registered in November 2012 and 7% in
December 2011. Comparable-store sales are now expected to rise in
the low single-digits in January 2013.
Other retailers who experienced soft comparable-store sales
The Cato Corporation
Wet Seal Inc.
), registering a sharp drop of 7% and 9.7%, respectively.
Comparable-store sales for December remained flat at
Victoria's Secret Stores & Victoria's Secret Beauty, but rose
7% at Bath & Body Works & The White Barn Candle Co.
However, comps dropped significantly by 9% at La Senza. Sales at
Victoria's Secret Direct remained even.
Limited Brands, which competes with
), said that net sales for December jumped 4.2% to $1,947 million
from $1,868 million posted in the comparable prior-year
In terms of performance, Limited Brands, the operator of 2,631
specialty stores in the United States, fared below its
(GPS), which posted comparable-store sales growth of 5%.
Limited Brands' comparable-store sales climbed 6% for the 48
week-period ended on December 29, 2012. Net sales dropped 1.2% to
$9,472 million for the period compared with net sales of $9,590
million last year. The year-ago period sales included $702.4
million from a third-party apparel sourcing business that was
sold in November 2011.
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 revamping
its La Senza brand alongside.
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. Moreover, Limited Brands holds a Zacks #3 Rank that
translates into a short-term "Hold" rating.
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