Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow.
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Highlights from the ratings report include:
- 45.60% is the gross profit margin for LIMITED BRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.57% trails the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Net operating cash flow has declined marginally to -$130.00 million or 0.77% when compared to the same quarter last year. Despite a decrease in cash flow of 0.77%, LIMITED BRANDS INC is in line with the industry average cash flow growth rate of -3.78%.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Specialty Retail industry average. The net income has decreased by 22.2% when compared to the same quarter one year ago, dropping from $94.28 million to $73.36 million.
Limited Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, beauty, and personal care products and accessories primarily in the United States and Canada. Limited has a market cap of $14.47 billion and is part of the services sector and retail industry. The company has a P/E ratio of 21.8, above the S&P 500 P/E ratio of 17.7. Shares are up 24.3% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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