Limited's profit leaps 62%, retailer changes its name

First-quarter earnings rise to 10 cents a share

May 21, 2002|By BLOOMBERG NEWS

COLUMBUS, Ohio - Limited Inc. reported yesterday that first-quarter profit rose 62 percent on lower costs. The second-largest U.S. clothing retailer also changed its name to Limited Brands, a name that it feels better reflects its transformation from a collection of specialty retailers to a family of brands.

Net income in the quarter that ended May 4 increased to $49.9 million, or 10 cents a share, from $30.7 million, or 7 cents, a year earlier, the owner of Limited and Express stores said in a statement. Revenue fell 4.7 percent to $2.03 billion, reduced by the sale of the Lane Bryant chain in August.

Limited kept inventory lean, brought in new goods faster and slowed hiring. The company further trimmed costs, and gained sales, as it bought back the 16 percent of Victoria's Secret parent Intimate Brands Inc. it didn't own. Limited said it will meet analysts' second-quarter earnings forecasts. Some investors may have hoped for the company to raise estimates, analysts said.

"We'd be more enthused if management had more visibility on earnings and had raised guidance," said Dave Duchow of Thompson Plumb & Associates, which manages about $1.7 billion, including 376,000 Limited shares. "They're going to grow, but it's difficult to grow rapidly given the size of the company."

The company's shares fell 75 cents, or 3.4 percent, to close at $21.50 on the New York Stock Exchange.

Sales at stores open at least a year rose 4 percent, Limited said. Same-store sales exclude results from new or closed stores. The company had $2.13 billion in sales a year earlier including Lane Bryant, which Limited sold to Charming Shoppes Inc. Excluding Lane Bryant, sales were $1.89 billion.

Adjusting for Lane Bryant and the March Intimate Brands transaction, Limited said it would have earned 15 cents a share in the first quarter and 5 cents a year earlier. On that basis, Limited was forecast to earn 11 cents, the average estimate of analysts surveyed by Thomson First Call.

Limited said it plans to open 100 stores, remodel 150 and close 130 stores this year so that square footage will be little-changed from last year. The company owns 4,602 stores. Limited will slow expansion at Bath & Body Works to include 40 store openings instead of 85.

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