Limited Brands, parent company of Express, Victoria's Secret and Bath & Body Works, said yesterday its Q4 profit dropped 15% on extended discounts and a comparison with a one-time tax gain a year ago. The company reported net profit of $439.8 million ($1.08/share) versus $519.2 million ($1.28/share) in the year-ago quarter, which included $0.29/share in one-time items. Sales were up 13.6% to $4.02 billion this year from $3.54 billion last year. Analysts were expecting EPS of $1.08 on revenue of $4.01 billion. Same-store sales were up 8%. Operating income rose 4.8%, to $726.8 million from $693.6 million. CEO Leslie Wexner added two weeks to Victoria's Secret's semi-annual sale last year, and also used promotions to boost holiday buying at Limited and Bath & Body Works. Those two divisions collectively represent 3/4 of Limited's revenue. The company is forecasting a low- to mid-single-digit rise in same-store sales for February, against an earlier projection of a high-single-digit rise, because of bad weather that kept customers out of stores. Q1 EPS are forecast at $0.25-0.28 versus the Street's expectation of $0.29. For full-year 2007, Limited is projecting EPS of $1.75-1.90 against analysts' $1.90 forecast.
Sources: MarketWatch, Wall Street Journal, Bloomberg
Commentary: Unlimited Selling at Limited Brands • Limited Brands: Victoria Is Not the Only One With a Secret
Stocks/ETFs to watch: Limited Brands, Inc. (LTD). Competitors: Gap Inc. (NYSE:GPS), TJX Companies Inc. (NYSE:TJX). ETFs: iShares Morningstar Mid Core Index (NYSEARCA:JKG)
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