Limited Brands Earnings Call Insights: Lingerie, Profitability, and Franchise …
November 19, 2012 by admin
Filed under Latest Lingerie News
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On Thursday, Limited Brands, Inc. (NYSE:LTD) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Lingerie and Profitability
Oliver Chen – Citigroup: Regarding the execution in bra and panties, and the opportunity there. Could you speak to what’s changing and what’s your liking in terms of features for holiday? As a follow-up from a bigger picture perspective, could you share with us your overviews of how you’re making efforts to balance your comp store sales versus profitability, and just remind us what comp do you leverage occupancy?
Amie Preston – IR: For the first part, the bra and panty question, obviously we’ll go to Sharen.
Sharen Jester Turney – CEO and President, Victoria’s Secret: First of all, I think in the bra and panty business that I’m excited about for holiday is that we are very well balanced across all of our price points in terms of good, better, best. The fashion mix this year is really outstanding. When we think about going into – we have an extra (floor set) this year because the elongated timeframe between Thanksgiving and the end of the January, which we think we’ll also look to business. We have a great mix for the younger customer from the PINK bra collection and doing very well in our lighter bras, all the way up to our higher end collection with Very Sexy, Dream Angels is extremely strong for us right now as well as our Body by Victoria. So good balance in price points, good balance in fashion, good balance in newness and great new flow as we reap this year.
Amie Preston – IR: Great thanks Sharen and we’ll go to Stuart for the second question, Oliver.
Stuart Burgdoerfer – EVP and CFO: Oliver in terms of balancing comps and profit as you’ve heard us talk about before. The most important thing in driving our pathway to 20% operating income rate is sales growth and we also understand the (adage) if you don’t take rate on to the bank meaning top line growth is very important. With that said we believe that there is significant opportunity to improve the profit rate of the business which we’ve talked about. So the net answer to your question, is the balance and if one ultimately has to choose probably a little more weight on dollars then on rate. In terms of the leverage point sales require two hold BO rate or leverage BO it’s between 3% and 4%, and as we invest more in stores as we’ve outlined as we are doing this year and we’ll do even more next year. That leverage point will go up a little bit, but we believe that those investments as we outlined at the investor update meeting are excellent investments for the company, but it will put a little more pressure on the BO rate.
