DOW JONES NEWSWIRES
Limited Brands Inc.'s (LTD) fiscal third-quarter profit more
than tripled on a tax gain, but the retailer surprised Wall Street
with earnings even after that gain was stripped out.
Adding to the optimism, the company also again raised its
fiscal-year earnings outlook, this time to a range of 93 cents to
$1.08 a share from the previous view of 75 cents to 90 cents. For
the current quarter, the company expects earnings of 71 cents to 86
cents a share, compared with the 79 cents projected by a Thomson
Reuters analyst poll.
In after-hours trading, Limited shares were up 3.5% at $18.90.
The stock has dropped about 10% from its 52-week high in late
October, but it remains up triple from the low in March.
The strong results and raised outlook suggest that consumers are
becoming less wary of spending on Limited's highly discretionary
lingerie and beauty products.
Looking to goose sales, the Victoria's Secret chain, its
biggest, has introduced less costly products and jazzed up its
color palette, while the Bath & Body Works chain is pushing
antibacterial products. The company also has expanded its offerings
of higher-margin jewelry and bags at its Henri Bendel chain. The
efforts may be paying off as Limited had its first same-store sales
growth in two years in September.
For the quarter ended Nov. 1, Limited reported earnings of $14.9
million, or 5 cents a share, compared with $4.2 million, or 1 cent
a share, a year earlier. The latest quarter's profit was 2 cents
excluding the tax benefit, better than the upbeat break-even to
4-cent-loss forecast given in late October.
Earlier this month, Limited reported net sales declined 3.5% to
$1.78 billion as same-store sales dropped 2%.
Gross margin widened slightly to 31.7% from 31.5%.
- By Jay Miller, Dow Jones Newswires; 212-416-2355;
jay.miller@dowjones.com