Jay Margolis will lead Express as its Chief Executive Officer. Express will continue to operate under the same brand name. It will remain headquartered in its current location in Columbus, Ohio and current management and associates are expected to remain with the brand. Express' 2006 net sales were $1.7 billion and it currently has 631 store locations.
Limited Stores: The Company also announced that it is exploring strategic options for its Limited Stores business. The Company has not established a timetable for the completion of this process. Limited Stores' 2006 net sales were $493 million and it currently has 253 store locations.
2007 Earnings Outlook: The Company stated that it now expects 2007 first quarter earnings to be $0.12 to $0.14, versus its initial guidance of $0.25 to $0.28, and $0.25 last year. The decrease versus initial expectations was driven by lower-than- anticipated sales and merchandise margins at each of its brands in the first quarter, particularly Victoria's Secret.
The Company expects that trends will continue to be challenging in the second quarter, especially at Victoria's Secret, and therefore estimates 2007 second quarter earnings per share to be $0.20 to $0.24 compared to $0.28 per share last year. This estimate does not include any impact from the Express transaction or potential strategic options for Limited Stores.
For the full year 2007, the Company now expects earnings per share of $1.55 to $1.65, versus its initial guidance of $1.75 to $1.90. This estimate does not include any impact from the Express transaction or potential strategic options for Limited Stores.
Call Information: Limited Brands' first quarter earnings will be released after the close of the market on May 23, 2007 and the live conference call will take place at 9 a.m. ET on May 24, 2007.
Financial Advisors: Banc of America Securities LLC advised the Company on the sale of Express, and has also been retained as financial advisor for the exploration of strategic options for Limited Stores. Golden Gate Capital has retained Morgan Stanley to provide financing for the Express transaction.
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