A hefty boost from consumers who failed to fully redeem their gift cards at Victoria's Secret was not enough to lift Limited Brands Inc.'s fourth-quarter earnings, which fell 11.6 percent on weak sales.
But for the year-end period, several big gains offset restructuring charges and led to a 6.3 percent net income gain.
For the fourth quarter ended Feb. 3, the retailer's net income dropped to $388.6 million, or $1.10 a share, from $439.8 million, or $1.08 a share, in the prior year on sales that fell 18.6 percent to $3.28 billion from $4.02 billion. Same-store sales declined 8 percent during the quarter, and the gross margin rate shed 28 basis points.
For the year, net income rose to $718 million, or $1.89, from $675.7 million, or $1.68, in the prior period on sales that fell 5 percent to $10.13 billion from $10.67 billion.
Net sales for the year include results from Express through July 2007 when the specialty chain was turned over to Golden State Capital Network and its investors following the sale of the brand.
For the year, results were bolstered by several gains relating to refinancing, taxes and other benefits that totaled more than $550 million. Results were offset by a $47 million restructuring charge and a second quarter pretax loss of $73 million relating to the selling of a 75 percent stake the group had in Limited Stores to Sun Capital Partners Inc.
In the fourth quarter, Limited said results include a pretax gain of $47.8 million "related to the recognition of initial gift card breakage at Victoria's Secret."
As way of guidance, the retailer said it "expects February comps in the negative low-double-digit range versus its previous guidance for negative mid- to high-single-digit comps."
First-quarter earnings per share are expected to range between 5 and 10 cents, which compares with 13 cents in the same period last year. For the full year, EPS is pegged at a range between $1.35 to $1.55.
A conference call to discuss results is scheduled for today.
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