Back to top

Analyst Blog

Limited Brands Inc. , a specialty retailer of women’s intimate and other apparel, beauty and personal care products, posted solid comparable-store sales growth of 9% for the five-week period ended Feb 2, 2013, that betters analysts’ expectations.

We observed that the rate of growth in comps for this Zacks Rank #3 (Hold) stock accelerated from an increase of 5% and 3% registered in Nov and Dec 2012, respectively. Management now projects comparable-store sales to rise in the low single-digits in Feb 2013.

Comparable-store sales for January increased 8% at Victoria’s Secret Stores & Victoria’s Secret Beauty, 15% at La Senza and 10% at Bath & Body Works & The White Barn Candle Co. However, sales dropped by 5% at Victoria’s Secret Direct.

Limited Brands, which competes with Hanesbrands Inc. (HBI - Analyst Report), said that net sales for January surged 27.4% to $986.4 million from $774.5 million posted in the comparable prior-year month. The last week of the period ended Feb 2, 2013 added sales of approximately $125 million.

Jan 2013 was strong on the whole for most retailers, with players such as Kohl's Corp. (KSS - Analyst Report), Nordstrom Inc. (JWN - Analyst Report) and Stage Stores Inc. (SSI - Snapshot Report) registering comparable-store sales growth of 13.3%, 11.4% and 10.5%, respectively.

In terms of performance, Limited Brands, the operator of 2,619 specialty stores in the United States, fared better than its competitor, Gap Inc. (GPS - Analyst Report), which posted comparable-store sales growth of 8%.

Limited Brands’ comparable-store sales climbed 5% for the 14-week fourth quarter ended Feb 2, 2013. Net sales surged 9.7% to $3,856 million for the period compared with net sales of $3,515 million last year. The year-ago period sales included $13.1 million from a third-party apparel sourcing business that was sold in Nov 2011. Management expects fourth-quarter fiscal 2012 earnings to be $1.73, which is in line with the Zacks Consensus Estimate.

Comparable-store sales for the 53-week period increased 6%, whereas net sales rose marginally by 0.9% to $10,459 million from $10,364 million in the year-ago period. The last year period sales included $702.4 million from a third-party apparel sourcing business that was sold in Nov 2011.

Let’s Conclude

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 concern.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
HI CRUSH PA… HCLP 68.05 +4.74%
CTPARTNERS… CTP 12.91 +3.12%
QIHOO 360 T… QIHU 90.56 +3.11%
HOLLYSYS AU… HOLI 22.85 +2.97%
BONANZA CRE… BCEI 61.57 +2.94%