Shares of L Brands, Inc. (LB) rose 5.4% following impressive comparable-store sales performance for the month of January that bettered analysts’ expectation. After a 2% increase registered in December, comps of this specialty retailer of women’s intimate and other apparel rose 9% for the four-week period ended Feb 1, 2014.
However, net sales of this Zacks Rank #5 (Strong Sell) stock witnessed a sharp drop of 25.9% to $731.2 million from $986.4 million in the prior-year period.
The holiday season was a tough one, while some make their way out, others struggled to lure budget-constrained consumers. Consumer spending environment was not very convincing, and bargain hunters went from one shop to another to grab the best deal. After a dismal holiday season, severe weather conditions dampened consumers’ spirit and restrained them from mall visits. Despite these challenges, L Brands managed to deliver healthy comps.
Other retailers that performed surprisingly well include Costco Wholesale Corporation (COST), Walgreen Co. (WAG) and The Gap, Inc. (GPS) posting comparable-store sales growth of 4%, 2.9% and 1%, respectively.
Coming to Limited Brands, comparable-store sales for January grew 10% at Victoria’s Secret Stores & Victoria’s Secret Beauty, 6% at Bath & Body Works & The White Barn Candle Co. and 4% at La Senza. However, sales declined 12% at Victoria’s Secret Direct.
For the 13-week period ended Feb 1, comparable-store sales climbed 1% compared with the 5% jump experienced in the prior-year period. Net sales for the period grew 1% to $3,818 million from $3,856 million in the year-ago period.
Management now projects total comparable-store sales ranging from flat to the low-single-digits for February.
Limited Brands, which is slated to release fourth-quarter fiscal 2013 results after the market closes on Feb 26, now projects earnings to be marginally ahead of its earlier provided guidance of $1.60 per share. The current Zacks Consensus Estimate for the quarter is $1.61.
The company currently operates about 2,923 stores.
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