Limited Brands Inc. (LTD) recently reported December net sales of $1.660 billion, an increase from last year’s $1.644 billion. Comparable store sales slipped 2% year-over-year. Shares spiked on the sales results and have maintained a higher level since, currently trading near a 52-week high.

Company Description

Limited Brands Inc. operates 3,025 specialty stores under the names of Victoria’s Secret, Pink, Bath & Body Works, C.O. Bigelow, La Senza, White Barn Candle Co. and Henri Bendel. The company sells women’s intimate and other apparel, beauty and personal care products, and accessories.

Shares Climb on December Sales

The company recently reported December net sales of $1.660 billion, an increase from last year’s $1.644 billion. Comparable store sales slipped 2% year-over-year.

Les Wexner, chairman and chief executive officer, said, “We are very pleased with our holiday performance. We managed inventory and expenses conservatively and focused on execution and speed to maximize sales and margin. Going forward, we plan to continue our conservative management of the business and increase our emphasis on speed and agility.”

Shares spiked on the sales results and have maintained a higher level since, currently trading near a 52-week high.

Limited also received an analyst upgrade after announcing December sales, pushing shares higher.

Bullish Forecasts

Limited hiked the fourth-quarter earnings guidance on the strong sales results, pegging the earnings range at 92 to 97 cents per share, an increase from the previous range of 71 to 86 cents.

Analysts polled by Zacks followed suit, boosting fourth-quarter earnings forecasts from 83 cents to 96 cents per share over the past month.

For the year ending January 2010, the Zacks Consensus Estimate is up from $1.05 to $1.17 per share over the past month.

For the following year, the projection increased from last month’s $1.25 to $1.37 per share.

Fourth-quarter and full-year results are scheduled for release on February 24.

A Solid Third Quarter

The company’s third-quarter earnings of 2 cents per share surpassed the previous year’s 1 cent and exceeded the Zacks Consensus Estimate of a 1-cent loss. Earnings have topped the Zacks Consensus Estimate by an average of 112.5% over the past 4 consecutive quarters.

Leading the Industry

The company’s return on equity (ROE) of 15.5% nearly doubles the industry average of 8%. Limited pays a dividend yield of 3%, while most its competitors pay no income.

Alex Kolb is the Growth & Income Stock Strategist for Zacks.com. He also writes the popular daily commentary column for the ZacksElite.com service.

Zacks Investment Research

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