Earnings Preview: Limited Brands – Analyst Blog

Limited Brands Inc.’s (LTD) sustained focus on cost containment, inventory management, and merchandise initiatives have kept it afloat in a difficult consumer environment. The company will report its first-quarter 2010 results on Wednesday.

 

Most of the company’s stores are located in retail shopping areas such as malls and other types of retail centers, which have been adversely impacted by the recent economic turmoil. These malls registered lower sales volume and declining traffic as consumers grappling with the recent economic downturn are trading down to cheaper brands. But with the revival of the economy, an improvement in sales has been experienced.

 

Limited Brands, a specialty retailer of women’s intimate and other apparel, beauty and personal care products, said that comparable-store sales for April 2010 climbed 4%.

 

The current Zacks Consensus Estimate for first-quarter 2010 is 19 cents. In the last 30 days, the Zacks Consensus Estimate has shown a substantial improvement of 18.8%, with 13 analysts out of 20 covering the stock raising the estimate.

 

For fiscal 2010, the current Zacks Consensus Estimate is $1.71 per share. In the last 30 days, the Zacks Consensus Estimate increased 3%, with 13 analysts out of 20 covering the stock raising their estimates.

 

With respect to earnings surprises, Limited Brands has performed across a wide range of earnings expectations over the last four quarters from approximately 3.1% to 300%. The average remained 111.7%, meaning that Limited Brands has beaten the Zacks Consensus Estimate by an average of 111.7% in the last four quarters.

 

Limited Brands shares are maintaining a Zacks #1 Rank, which translates into a short-term ‘Strong Buy’ recommendation. Our long-term recommendation for the stock also remains “Outperform”.