Favorable weather conditions and an improving economic backdrop instilled confidence among consumers that led to strong spending during the month of May. Amid such a positive scenario L Brands, Inc. posted comparable-store sales growth of 3% for the four-week period ended Jun 1, 2013, reflecting a sequential improvement of 100 basis points.
This specialty retailer of women’s intimate and other apparel, beauty and personal care products showcased an increase of 9.7% in net sales of $737 million from $671.9 million in the prior-year period. In the past few months unseasonable cold weather dampened the mood of consumers that muted retailers’ performance. However, an improving job market, lower gas prices and rebound in the housing market boosted consumer sentiment.
Besides Limited Brands, other retail chains that posted healthy sales data for the month of May, include, clothing chain, The Gap, Inc. (GPS - Free Report) that registered comps growth of 7%, the warehouse retailer, Costco Wholesale Corporation (COST - Free Report) delivered comparable-store sales growth of 5%, while retailer of casual apparels, footwear and accessories for men and women, Buckle Inc. (BKE - Free Report) registered a 4.1% rise in comps.
Coming to Limited Brands, comparable-store sales for May increased 4% at Victoria’s Secret Stores & Victoria’s Secret Beauty, 4% at La Senza and 3% at Bath & Body Works & The White Barn Candle Co. Sales climbed 4% at Victoria’s Secret Direct. Management now projects total comparable-store sales to rise in the low single-digit for the month of June.
For the seventeen-week period ended Jun 1, 2013, comparable-store sales jumped 3%, whereas net sales rose 6.3% to $3,005 million from $2,826 million in the year-ago period.
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 for this Zacks Rank #3 (Hold) stock.