For Immediate Release
Chicago, IL – December 6, 2011 – Zacks.com announces the list of
stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
blog include Limited Brands Inc.
( LTD), Gap Inc. ( GPS), Hanesbrands
Inc. ( HBI), FedEx Corporation ( FDX) and
United Parcel Service ( UPS).
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Here are highlights from Monday’s Analyst
Blog:
Limited Brands’ Sales Rise
Limited Brands Inc. ( LTD), a specialty
retailer of women’s intimate and other apparel, beauty and personal
care products, recently posted better-than-expected sales results
for the four-week period ended November 26, 2011 on the heels of
healthy sales at its Victoria's Secret Stores and Bath & Body
Works.
The owner of Victoria's Secret Direct and La Senza chains has
sustained its growth momentum. Limited Brands’ comparable-store
sales for November 2011 rose 7% following an increase of 6% in
October 2011 and compared with a 10% jump in November 2010.
Comparable-store sales for November increased 11% at Victoria’s
Secret Stores & Victoria’s Secret Beauty and 6% at Bath &
Body Works & The White Barn Candle Co. but declined 7% at La
Senza. Sales at Victoria’s Secret Direct dropped 3%.
Limited Brands, which competes with Gap Inc. (
GPS) and Hanesbrands Inc. ( HBI), said that net
sales for November fell 2.3% to $872.6 million from $893 million
posted in the same month last year.
For the forty-three week period ended November 26, 2011,
comparable-store sales surged 10%, whereas net sales jumped 9.5% to
$7,721 million from $7,050 million reported in the prior-year
period.
Limited Brands is also actively managing its cash flows, and
returning much of its free cash via dividends and share
repurchases. The company announced a special dividend of $2 per
share payable on December 23, 2011, to shareholders of record as of
December 12, 2011. Considering this dividend, the company would
have returned $12 billion to stockholders since 2000.
Management expects to generate free cash flows of about $700
million during fiscal 2011, and exit the year with a cash balance
of about $800 million, taking into account the special dividend
that has been declared.
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.
FedEx Raises Domestic Rates Again
FedEx Corporation ( FDX) will reportedly raise
its freight service prices for the next year. The company’s ground
and home delivery rates have been raised by 4.9%, effective
January.
The hike follows an average rate hike of 3.9% in U.S. domestic,
export and import services implemented in October. Concurrently,
FedEx had also introduced a general rate hike of 6.75%.
FedEx, along with its peers like United Parcel
Service ( UPS) have been successful in implementing rate
hikes even amid a gloomy economic outlook, given the strengthening
of freight market fundamentals. Further, the softness in U.S.
postal service’s business has also aided these companies to gain
significant market share.
Despite the price hike, FedEx expects to sustain top-line growth
in Ground and Freight segments on strong yields. Part of this
momentum is expected to come from international expansion.
Moreover, FedEx expects growth in Asia, Latin America, China,
India, Mexico and Brazil to augur well. The company also aims at
enhancing existing routes and making strategic acquisitions.
Accordingly, it bought AFL Pvt. Ltd, a logistics, distribution and
express business in India that improved its position in the freight
market. Its acquisition of MultiPack, a Mexican domestic express
package delivery company, in the second quarter this year was also
in sync with its growth strategy.
Further, the company is realigning its network capacity to match
weak international volumes due to the drop in Asian demand.
Consequently, FedEx has taken several initiatives including
reducing flights and frequencies as well as redeploying equipment
in other networks to reduce costs.
We believe all these strategic decisions would lead to improved
revenue, margins, earnings and cash flow this year and beyond.
However, increased investments, competitive threats, unionized
workforce and steeper fuel prices could limit the upside potential
of the stock.
We are currently reiterating our long-term Neutral rating on
FedEx. The stock retains a Zacks #3 (Hold) Rank for the short
term.
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FEDEX CORP (FDX): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
HANESBRANDS INC (HBI): Free Stock Analysis Report
LIMITED BRANDS (LTD): Free Stock Analysis Report
UTD PARCEL SRVC (UPS): Free Stock Analysis Report
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