Limited Brands' Comps Rise - Analyst Blog
30 Novembre 2012 - 5:00PM
Zacks
Limited Brands
Inc. (LTD), a specialty retailer of women’s intimate and
other apparel, beauty and personal care products, posted
comparable-store sales results for the four-week period ended
November 24, 2012 that betters analysts’ expectation.
The owner of Victoria's Secret
Direct and La Senza chains sustained its growth momentum with
comparable-store sales increasing sequentially. Limited Brands’
comparable-store sales for November 2012 rose 5% following an
increase of 3% in October. In November 2011 the company had
registered comparable-store sales growth of 7%. Comparable-store
sales are now expected to rise in the low single-digits in
December.
Management hinted that Hurricane
Sandy adversely impacted the comps by 1% to 2%. Other retailers who
experienced soft sales were Macy’s Inc. (M),
Nordstrom Inc. (JWN) and Kohl’s
Corporation (KSS) registering a decline of 0.7%, 1.1% and
5.6%, respectively.
Comparable-store sales for November
increased 4% at Victoria’s Secret Stores & Victoria’s Secret
Beauty, 6% at Bath & Body Works & The White Barn Candle Co.
and 5% at La Senza. Sales at Victoria’s Secret Direct rose 2%.
Limited Brands, which competes with
Hanesbrands Inc. (HBI), said that net sales for
November jumped 5.7% to $922 million from $872.6 million posted in
the comparable prior-year month. The prior-year period sales
included $13.1 million from a third-party apparel sourcing business
that was sold in November 2011.
In terms of performance, Limited
Brands, the operator of 2,632 specialty stores in the United
States, fared better than its competitor, Gap Inc.
(GPS), which posted comparable-store sales growth of 3%.
Comparable-store sales climbed 7%
for the 43 week-period ended on November 24, 2012. Net sales
dropped 2.5% to $7.525 billion for the period compared with net
sales of $7.721 billion last year. The year-ago period sales
included $702.4 million from a third-party apparel sourcing
business that was sold in November 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.
Currently, we have a long-term
“Neutral” recommendation on the stock. Moreover, Limited Brands
holds a Zacks #3 Rank that translates into a short-term “Hold”
rating.
HANESBRANDS INC (HBI): Free Stock Analysis Report
NORDSTROM INC (JWN): Free Stock Analysis Report
KOHLS CORP (KSS): Free Stock Analysis Report
LIMITED BRANDS (LTD): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
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