Limited Brands Earnings Call Nuggets: Bra Category Outlook and Hong Kong Stores
Bra Category Outlook
Kimberly Greenberger – Morgan Stanley: Amie, my question is for Sharen on Victoria’s Secret. Sharen, I am wondering if you could just help us understand your outlook in the bra category. I know that the business didn’t perform to your expectations here in Q1. What sort of launches do you have coming in the pipeline? You said you are encouraged by what we’ve got coming and is 2Q a big quarter for the bra category or does it sort of accelerate in 3Q and 4Q, if you could just help us with that?
Sharen Jester Turney – CEO and President, Victoria’s Secret: Let me just kind of set some context about the bra business. Our bra business in the first quarter was up 4%. We exited about 1 million units that we sold last year that were not in the assortment this year. Performance of those bras started decreasing significantly in Q2 last year (indiscernible) was the right thing to do. We launched Angel’s Fantasies bra and were able to up some of that volume, but not all. We were also going up our largest launch ever, Very Sexy last year and we have high expectations this year for our multi-brand category. We did get double-digit results, but it did fall slightly short of our expectations. So, when you add all of that up and we were still able to run at 4%, so I am very optimistic. We continue to have balanced growth across good, better, best. Good is growing a little faster because of the fashion in the mix and match program and in the Pink (indiscernible) but again we are seeing growth across the good, better, best category. I feel good about Q2. Q2, we do not have a real media launch, that means putting TV behind it nor have we had in the past. We have already (landed) the launch bra for the second quarter. It is a smaller launch quarter than the first quarter. Our biggest launch quarter comes out in the third quarter, this year because of the shift in calendar will be starting in the last week of July.
Hong Kong Stores
Zick – ISI Group: This is (Zick) in for Omar. Could you give us some more color around how the Hong Kong stores are doing and what do you think the longer term opportunity is in this market?
Martin Waters – President, Limited Brands International: We opened two stores in Hong Kong in the last month. One in IFC Centre, which is the most fashionable centre in the whole of Hong Kong and the second in New Town Plaza in the New Territories, which is more representative of more mainstream Hong Kong. Both are great centres for Chinese stores. So, we feel that we are exposing the VSBA proposition to a significant number of tourists from all over the world, but also most importantly from mainland Chinese stores. Another results are really very encouraging and we’ll open a third store within the next month or so and we are looking to open more stores in the balance of ’13 and ’14.
A Closer Look: L Brands Earnings Cheat Sheet>>