The Limited Lacks Sex Appealhttp://www.fool.com/investing/dividends-income/2008/05/22/the-limited-lacks-sex-appeal.aspx Ryan Fuhrmann, CFA
May 22, 2008
Unlike the glamorous models posing in its Victoria Secret's catalogs, Limited Brands (NYSE: LTD ) doesn't look so hot right now. With gas prices at all-time highs, few consumers have enough cash left over to splurge on expensive lingerie or premium-priced creams from Bath and Body Works.
At first glance, the first-quarter earnings Limited reported after the market closed yesterday more than doubled to $0.28. However, it took a one-time gain to get to that figure. Excluding the net gain from the sale of a joint venture, Limited's bottom line fell to $0.10 per share. That still came in ahead of what analysts were projecting -- the key reason why the stock is trading up today.
However, sales trends remain worrisome. Total sales fell nearly 17%, as new store openings failed to offset an 8% drop in same-store sales. Expanding Victoria Secret's store base did help the segment's total sales figure increase 4%,