Cutting costs helps Limited Brands 3Q profit

AP News
Posted: Nov 18, 2009 5:49 PM

Victoria's Secret parent Limited Brands Inc. said Wednesday that its third-quarter profit rose above its own forecast, helped by cost cuts and a tax gain.

Limited Brands raised its full-year guidance, and its shares rose 48 cents, or 2.6 percent, to $18.75 during aftermarket trading.

The company's expenses fell 7 percent. Like many other retailers, it has focused on cutting costs to offset weak sales during the recession.

The operator of Bath and Body Works and other chains as well as Victoria's Secret, the company said its profit rose to $14.9 million, or 5 cents per share, compared with $4.2 million, or a penny per share a year earlier.

Profit totaled 2 cents per share, excluding the benefit mainly of resolving "certain tax matters," the company said. It had forecast it would break even or lose up to 4 cents per share. Analysts polled by Thomson Reuters, on average, predicted a loss of a penny per share.

Revenue fell 4 percent to $1.78 billion, from $1.84 billion last year. Analysts expected revenue of $1.77 billion.

Sales in stores open at least one year, considered a key retail measurement because it excludes the effect of newly opened or closed stores, fell 2 percent.

For the year, the Columbus, Ohio, company expects adjusted earnings of 93 cents to $1.08 per share, up from 75 cents to 90 cents per share. Analysts expect a profit of 97 cents per share.

The company expects to earn 71 cents to 86 cents per share in the fourth quarter, while analysts predict a profit of 79 cents per share.