Limited Brands' Earnings Beat Last Year's by 19%

Limited Brands (NYSE: LTD  ) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 28 (Q4), Limited Brands met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share dropped.

Gross margins dropped, operating margins grew, net margins contracted.

Revenue details
Limited Brands logged revenue of $3.52 billion. The 17 analysts polled by S&P Capital IQ expected revenue of $3.50 billion on the same basis. GAAP reported sales were 1.7% higher than the prior-year quarter's $3.46 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $1.50. The 24 earnings estimates compiled by S&P Capital IQ averaged $1.46 per share on the same basis. GAAP EPS of $1.17 for Q4 were 14% lower than the prior-year quarter's $1.36 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 43.5%, 1,330 basis points worse than the prior-year quarter. Operating margin was 21.7%, 90 basis points better than the prior-year quarter. Net margin was 10.2%, 290 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.11 billion. On the bottom line, the average EPS estimate is $0.43.

Next year's average estimate for revenue is $10.36 billion. The average EPS estimate is $2.89.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 554 members out of 655 rating the stock outperform, and 101 members rating it underperform. Among 212 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 192 give Limited Brands a green thumbs-up, and 20 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Limited Brands is outperform, with an average price target of $44.70.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Limited Brands. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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