Columbus, Ohio Wall Street got an unexpected surprise late Wednesday when The Limited Brands beat estimates with a first-quarter profit. Analysts expected a loss from the company, but strategic cost-cutting measures offset lower sales and effected the surprising turnaround.
Profit for the quarter was $2.6 million, down sharply from a $97.8 million profit last year. Revenue dropped 10% to $1.73 billion. Analysts expected a loss on slightly higher revenue of $1.75 billion.
"Limited is an underloved recovery story," Lazard Capital Markets analyst Todd Slater wrote in a research note to investors. He said the company's improved margins and growing profit from international royalties should help boost its performance.
Same-store sales fell 7% during the quarter.
Limited has faced falling sales as consumers curb spending during the recession, but it has cut its costs in response.
The company said it now expects a profit to end its 2009 fiscal year.