L Brands, Inc. posted comparable-store sales increase of 8% for the four-week period ended Nov 2, 2013 that betters analysts’ expectations and rose sharply from 3% growth attained in the prior-year period. This specialty retailer of women’s intimate and other apparel, beauty and personal care products showcased an 11.4% rise in net sales of $680.5 million from $611 million in the prior-year period.
On the whole, retailers came up with better sales results for the month of October, amid an environment that grappled with a 16-day government shutdown, an uncertain economic recovery and soft job opportunities. Retailers spent more on promotions and came up with lucrative discounts to drive traffic. However, heavy discounts raise concerns about margins.
Apparel retailer, Stein Mart Inc. impressed analysts by posting a 5.4% rise in comps, while The Gap, Inc. (GPS - Analyst Report), witnessed a 4% increase in comps. Costco Wholesale Corporation (COST - Analyst Report), the warehouse club operator, reported comps growth of 3% for the month of October.
Coming to Limited Brands, comparable-store sales for October rose 10% at Victoria’s Secret Stores & Victoria’s Secret Beauty and 4% at Bath & Body Works & The White Barn Candle Co. but fell 2% at La Senza. Sales tumbled 7% at Victoria’s Secret Direct.
For third-quarter fiscal 2013, comparable-store sales increased 3%, whereas net sales rose 6% to $2,171.1 million from $2,050.2 million in the year-ago period.
Management now projects total comparable-store sales to decline in the low single-digits for the month of November as Thanksgiving Day falls one week later in 2013. For the fourth quarter comps are expected to increase in the low single-digits.
Limited Brands, which operates 2,876 stores, holds a Zacks Rank #3 (Hold). The company, which is slated to reports its third-quarter fiscal 2013 earnings results on Nov 20, now anticipates earnings to dovetail with the upper end of its previously provided guidance range of 23 cents to 28 cents. The current Zacks Consensus Estimate for the quarter is 27 cents a share.