NEW YORK — Limited Brands reported a better-than-expected 7.3 percent rise in fourth-quarter earnings, led by results at its Bath & Body Works and Victoria’s Secret divisions that were partially offset by soft sales at Express and Limited apparel stores.

The company earned $415.8 million, or 95 cents a share, in the three months ended Jan. 29, compared with $387.6 million, or 74 cents, during the same period last year. The consensus estimate on Wall Street was for a profit of 90 cents in the 2004 quarter.

Total annual sales for Limited Brands, based in Columbus, Ohio, rose 3 percent to $3.3 billion from $3.2 billion, while same-store sales were up by 2 percent.

“What we need as an enterprise…is to drive productivity, to drive top line, drive transactions by having attractively priced products that captivate our customers, get them in the store and get them to say, ‘I’ll take it home,’” Ann Hailey, chief financial officer of Limited Brands, said on the conference call.

Ken Stevens, chief executive officer of Express, specifically referring to the Express division, said on the call: “Fourth-quarter financial performance was disappointing and well below our expectations. A significant decline in operating income was driven by negative 17 percent comps and a higher markdown rate year-over-year….We went too conservative in our tops focus, maybe a bit weekend preppy versus the more feminine fashion-forward tops our customers seem to prefer from our brand.”

Regarding the new C.O. Bigelow concept, which officially launched on Feb. 16, Leonard Schlesinger, vice chairman and chief operating officer of Limited Brands, said on the call that the company is “encouraged by customer response.” 

The firm is committed to expanding both Bigelow and its Henri Bendel stores in 2005, he said. Limited Brands expects to announce within the next 30 to 45 days the new store locations for each of the two nameplates.

In full-year 2004, Limited Brands earned $738.7 million, or $1.54, versus $716.8 million, or $1.36, in 2003. On an adjusted basis, the company earned $670.6 million, or $1.40, in 2004, up from $583.8 million, or $1.11, in 2003. Adjusted results for 2004 exclude pretax, nonoperating gains from the early collection of a note, the sale of the firm’s remaining interest in Galyan’s Trading Co. and proceeds from its New York & Co.’s initial public offering. Adjusted results for 2003 exclude pretax, nonoperating gains from the sale of the firm’s investment in Alliance Data Systems Corp.

This story first appeared in the February 25, 2005 issue of WWD. Subscribe Today.

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Sales for the year were $9.41 billion, up 5.3 percent from $8.93 billion, while comps advanced 4 percent.

Limited Brands estimated 2005 first-quarter earnings of 13 cents, below analysts’ consensus for 16 cents. For the full year, the company forecasted earnings growth of 13 to 15 percent, in line with analysts’ consensus of $1.59.

Separately, Limited, like many other retailers, is restating certain of its previously filed financial statements due to changes in the way it accounts for store leases; the company does not expect the accounting change to have a significant impact on past earnings. The changes were to keep procedures in line with the views expressed by the Office of the Chief Accountant of the Securities and Exchange Commission on Feb. 7.