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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 Apr 6, 2013, that betters analyst expectations.

However, we observe that the rate of comps growth in March for this Zacks Rank #4 (Sell) stock remained constant with that of February, but decelerated sharply from an increase of 9% in Jan 2013. Management now projects comparable-store sales to rise in the low single-digit for the month of April, and hinted that with early Easter on Mar 31 this year versus Apr 8 in the previous year would favorably impact April comps.

Comparable-store sales for March increased 2% at Victoria’s Secret Stores & Victoria’s Secret Beauty, 7% at La Senza and 4% at Bath & Body Works & The White Barn Candle Co. However, sales dropped 9% at Victoria’s Secret Direct.

Limited Brands, which competes with Hanesbrands Inc. (HBI - Analyst Report), said that net sales for March rose 6% to $894.8 million from $840.9 million posted in the comparable prior-year month.

For the nine-week period ended Apr 6, 2013, comparable-store sales jumped 3%, whereas net sales rose 7.5% to $1,607 million from $1,495 million in the year-ago period.

As a whole, Mar 2013 was tough for most retailers as unfavorable weather conditions, higher taxes and sluggish recovery in the labor market hurt consumers’ enthusiasm. The retail chains like The Cato Corporation and The TJX Companies, Inc. (TJX - Analyst Report) witnessed comps decline of 11% and 2%, respectively.

However, analysts are of the view that the calendar shift in Easter and expected fall in gasoline prices coupled with tax refunds that are gradually making their way in, could lead to a rise in discretionary spending and in turn better comps in April.  

Let’s Conclude

Limited Brands’ 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.

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