Limited Brands on Wednesday (23 May) reported reduced first quarter profits that fell within the lower guidance it had provided last week.

However, the Columbus, Ohio-based specialty store firm, which is in the process of reducing its apparel assets, said that its May same-store sales would decline in the low-single digits, versus an earlier projection of a gain of the same magnitude.

In the 13 weeks ended 5 May, net income contracted 46.7% to US$52.9m, or $0.13 a diluted share, from $99.4m, or $0.25, in the year-ago quarter.

The EPS result fell in the middle of guidance of $0.12 to $0.14 provided by the company on 15 May, when it reported that it had agreed to sell a majority stake in its Express unit and was seeking alternatives for its Limited Stores division.

Sales picked up 11.3% to $2.31bn from $2.08bn in the 2006 quarter. Same-store sales were up 4%.

Weakness at the Victoria's Secret division contributed to a reduction in gross margin to 34.8% of sales from 38% a year ago.

The firm, which earlier completed a $200m share repurchase programme, has authorised the repurchase of up to $500m in additional shares.

"Over the last five years, we have returned more than $5bn in value to shareholders," said Leslie Wexner, chairman and CEO of the company.

"Subsequent to our announcement last week of the sale of a majority interest in Express and our intent to explore strategic options for Limited Stores, this latest share repurchase programme reflects our confidence in the strength and future growth of our intimate apparel and personal care and beauty brands."

Limited Brands also operates Bath & Body Works, La Sense, White Barn Candle and Henri Bendel, among other nameplates.
By Arnold J Karr.