The 10-second takeaway
For the quarter ended Feb. 2 (Q4), Limited Brands beat slightly on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew significantly. GAAP earnings per share grew significantly.
Gross margins dropped, operating margins increased, net margins expanded.
Limited Brands recorded revenue of $3.86 billion. The 22 analysts polled by S&P Capital IQ wanted to see sales of $3.80 billion on the same basis. GAAP reported sales were 9.7% higher than the prior-year quarter's $3.52 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.76. The 25 earnings estimates compiled by S&P Capital IQ anticipated $1.74 per share. Non-GAAP EPS of $1.76 for Q4 were 17% higher than the prior-year quarter's $1.50 per share. GAAP EPS of $1.39 for Q4 were 20% higher than the prior-year quarter's $1.16 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 44.5%, much worse than the prior-year quarter. Operating margin was 22.8%, 40 basis points better than the prior-year quarter. Net margin was 10.7%, 50 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $2.25 billion. On the bottom line, the average EPS estimate is $0.51.
Next year's average estimate for revenue is $10.90 billion. The average EPS estimate is $3.25.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 565 members out of 662 rating the stock outperform, and 97 members rating it underperform. Among 226 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 212 give Limited Brands a green thumbs-up, and 14 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 $52.27.
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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 has no position in any of the stocks mentioned. 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.