Victoria’s Secret is the Key to Limited Brands’ Recent Success
Intimate apparel retailer Limited Brands (NYSE:LTD) posted strong results ahead of market expectations a few weeks back riding primarily on the growth of its most well known brand Victoria’s Secret. [1] Additionally the company reported a comp sales increase across all of its major brands except for it Canadian brand La Senza. We believe the results and the growth across both lingerie and personal care business have been commendable, and with the level of preparations for the holidays that Limited displayed during its Q3 earnings call, the company looks ready for further growth this holiday season. Limited Brands is a specialty apparel retailer focused on lingerie, beauty and personal care products competing with the likes of Abercrombie & Fitch (NYSE:ANF), American Eagle Outfitters (NYSE:AEO), Ann (NYSE:ANN), Gap (NYSE:GPS), and J.Crew Group (NYSE:JCG).
We have revised our price estimate for Limited Brands to $39.62, which is inline with the current market price.
- L Brands Stock Can Gain 2x The S&P 500, But There Is A Catch
- Limited Brands Reports Steady Growth In Q3; Outlook Looks Good
- Limited Brands Earnings Preview: Intimates Will Drive The Company Through The Industry Slump
- Good Inventory Planning And Global Expansion Will Drive Limited Brands’ Growth
- Intimates Are Driving Victoria’s Secret Growth Despite A Lull In Apparel Sales
- Limited Brands Posts Steady Growth And Raises Its Outlook
See our full analysis of Limited Brands
Victoria’s Secret was the major growth driver this quarter
While Limited registered revenue growth across all of its major brands, Victoria’s Secret was the major growth driver for Q3. Victoria’s Secret U.S. stores registered a comp increase of 12%, benefiting from the wide array of its assortment which includes major third quarter launches such as Showstopper Bra, the PINK, the Heartbreaker Bra, the Unforgettable Bra and the Gorgeous Bra.
Additionally the company also registered an 8% revenue increase in Victoria’s Secret direct channel. The growth in direct channel was primarily driven by PINK, sleepwear, panties and knit clothing.
Limited looks impressive with its holidays prepping
Alongside solid Q3 results, the company also impressed with its preparations for the all important holiday season. While Victoria’s Secret is focused on continuing its offering to be fashion-right, for Bath & Body Works the company is banking on newness and innovation in both form and in fragrances.
Additionally the company is also running several holiday special themes to enhance its in-store experience. A great in-store experience has always been a major focus area for Limited Brand, which is supported by the trend that the company’s retail growth is greater than its direct channel, the opposite to that of most other apparel retailers. We expect the enhancement in in-store experience to further boost the retail sales for the holidays.
Understand How a Company’s Products Impact its Stock Price at Trefis
Notes:- Limited brands report its Q3 results, Source: Limited Brands IR [↩]