Earnings Call Excerpt
Limited Brands (LTD)
December Sales Results Call
January 10, 2008, 7:30 am ET
Executives
Amie Preston – Vice President Investor Relations
Presentation
Amie Preston
This is Limited Brands December sales report for the five week period ending January 5, 2008. As a matter of formality, I need to remind you that any forward-looking statements I may make today are subject to the Safe Harbor Statement found in our SEC filing.
Total Limited Brand sales for the five weeks ended January 5, 2008 were $1.744 billion compared to sales of $2.027 billion for the five weeks ended December 30, 2006. Limited Brands comps on a calendar basis were down 8% below expectations. Both Victoria’s Secret and Bath & Body Works were challenged by negative traffic levels. December merchandise margin rates were down significantly to last year.
Retail inventories consisting of Victoria’s Secret and Bath & Body Works ended the month down 33% versus last year on a per square foot basis at cost. Although there is still months left in the fourth quarter as a result of the 8% decline in comparable store sales quarter to date, versus our previous expectation for a low single digit decline, we now expect to report fourth quarter earnings per share at the low to mid point of our previously announced range of $0.90 to $1.05.
Now for the individual brand results beginning with Victoria’s Secret Stores. Victoria’s Secret Stores comp store sales for December were down 8% to last year and below expectations, against a 10% comp increase last year. The external business environment remained challenging contributing to disappointing sales. Our sales decline was driven by bras, panties, sleepwear and beauty partially offset by moderate growth in Pink. The merchandise margin rate was down significantly to last year. The decline was primarily driven by the impact of the calendar shift this year as it relates to our semi annual sales. The sales started on January 3rd both this year and last year, however January 3rd was included in fiscal December this year and fiscal January last year. Leading up to the holiday we featured our first ever Super Model Pajama Party, beauty gift sets and additional gift giving merchandise. To capitalize on post holiday mall traffic we featured an in-store bra event offering bras at buy one, get one at 50% off pricing, and in line with last year, we began our semi annual sale shortly after the holiday. In January we will continue with our semi annual sale followed by our Valentine’s Day floor set at month-end.
- To read the full transcript on Seeking Alpha, click here »
