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Limited Beats Expectations

Shares get a boost after the retailer posts a 36% rise in profits.
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Limited Brands


posted a 36% gain in profits for its holiday quarter and beat Wall Street's expectations, sending shares higher Thursday.

The retailer's net income rose to $519.2 million, or $1.28 a share, from $382.5 million, or 87 cents a share, a year earlier. The latest quarter's results included a benefit from tax gains totaling 25 cents a share, a 4 cents-a-share gain related to gift cards sold that may not be redeemed, and a charge of 6 cents a share related to a change in inventory valuation.

Excluding items, the company's earnings totaled $1.05 a share. Analysts were expecting earnings from continuing operations of $1.01 a share, according to Thomson First Call.

"We're pleased that we were able to exceed our initial fourth-quarter earnings guidance of $1 per share by five cents," the company said in a statement. "Victoria's Secret, our largest brand, had a solid performance, driven by Pink and the Direct business. The apparel segment improved profitability, driven primarily by an improved performance at Express. Holiday results at Bath & Body Works did not meet our expectations."

Limited's total sales rose 6% to $3.54 billion. Same-store sales, measuring sales at stores open at least a year, rose 3%.

For the first quarter, the company projects earnings of 16 cents a share, which would be roughly flat with last year's results, including charges. For 2006, the company forecasts earnings of $1.40 to $1.50 a share, up from 2005's earnings of $1.33 a share. Analysts expect earnings of 7 cents a share for the first quarter and $1.47 a share for the year.

Shares of Limited were recently up $1, or 4.3%, to $24.41.