Limited Brands Inc. (LTD), a specialty retailer of women’s intimate and other apparel, beauty and personal care products recently posted impressive sales results for the five-week period ended July 02, 2011 on the heels of healthy sales at its Victoria's Secret Stores and Bath and Body Works.
The owner of Victoria's Secret and La Senza chains sustained its growth momentum in June 2011 and posted a 12% growth in comparable-store sales, following an increase of 6% in May 2011 and June 2010, respectively.
Comparable-store sales for June climbed 17% at Victoria’s Secret Stores & Victoria’s Secret Beauty, 5% at Bath & Body Works & The White Barn Candle Co. and 1% at La Senza.
Limited Brands, which competes with Gap Inc. (GPS) and Hanesbrands Inc. (HBI), stated that net sales for June rose 11.9% to $1,080 million from $965.4 million posted in the same month last year.
For the twenty-two week period ended July 02, 2011, comparable-store sales surged 12%, whereas net sales jumped 13% to $4,015 million from $3,554 million reported in the prior-year period.
Limited Brands’ sustained focus on cost containment, inventory management, and merchandise initiatives facilitate it to augment sales and post healthy results. Management forecasts fiscal 2011 earnings between $2.25 and $2.45 per share.
The company’s Bath & Body Works segment is gaining traction, driven by a rise in store transactions, enhancement in the direct channel business and growth in new stores. Victoria’s Secret Stores has been performing well, and the company is also revamping its La Senza brand.
Limited Brands is keen to enhance its retail footprint across the globe by expanding aggressively in Canada and other international markets. Moreover, the company’s strong liquidity positions it to drive growth and enhance return. However, stiff competition and erratic consumer behavior still remain matters of concern.
Currently, we have a long-term ‘Neutral’ recommendation on the stock. Moreover, Limited Brands holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
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