Limited Trips on Earnings Miss, Soft Guidance

Shares of clothing retailer Limited Brands fell 1% in after-hours trading Tuesday as the company missed consensus analyst estimates in its latest quarter and issued soft guidance for the holiday shopping season. Q3 net income tumbled 48.5% to $12.1 million, good for EPS of $0.03, versus EPS of $0.06 a year ago. Discounting a $0.04 a share pretax gain, adjusted EPS was -$0.01. Sales fell 9% to $1.92 billion. Consensus analyst estimates were for adjusted EPS of $0.01 on sales of $1.95 billion. Operating income fell operating income fell 8% Y/Y to $61.1 million while same store sales were down 3% Y/Y after the company had predicted flat same-store sales. Looking ahead, Limited expects Q4 EPS of $0.90 to $1.05 (mid-point $0.975), versus $1.08 a year ago. Consensus analyst estimates are for Q4 EPS of $1.09. Said portfolio manager Greg Estes: "It's just not a good time for consumers, and I'm not very optimistic that the holiday season's going to have very good results."

Sources: Press release, Wall Street Journal, TheStreet.com, Reuters, Dow Jones Newswires
Commentary: Retail on Sale - Barron's • Limited Brands' Potential Looks Unlimited - Barron's • Cramer on LTD
Stocks/ETFs to watch: LTD. Competitors: GPS, AEOS, JCG. ETFs: RTH, XRT
Earnings call transcript: Limited Brands Q3 2007

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