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Check it out -- PE <4 -- increasing sales -- Internet, money/entertainment populace will make sales in Lingerie, Bathing Products, Teenage & Classic Clothing, etc. continue to skyrocket. Jan 06, 1999 FOOL PLATE SPECIAL An Investment Opinion by Warren Gump The Secret's Out Lingerie and beauty products maker Intimate Brands (NYSE:IBI - news) , operator of the Victoria's Secret and Bath & Body Works chains, beat most retailers by a day and announced December sales this morning. The stock is up $1 1/2 to $31 1/2 at midday. Apparently Santa's elves were actively purchasing from these shops, as same-store sales increased 6% for the five weeks ended January 2. Due to these strong results, the company projected that this quarter's earnings per share (EPS) will be $0.02 higher than expected, indicating that Q1 EPS will be at least $0.95. Once again, the company will achieve annual earnings growth in excess of 20%. The results for this year's holiday season are more impressive because they are being racked up on top of last year's strong 11% comparable-store sales. Substantially boosting sales from a record platform is a sign of an extremely successful retailer. On top of that, all of this is occurring in the important Q4 period when the company earns about 60% of its annual profits. If trends from Q3 continued in the current quarter, sales are being supported by new product introductions and national advertising at Victoria's Secret. Bath and Body Works was cleaning up across all product categories. You can, of course, also order Victoria's Secret products over the Web (Bath and Body Works isn't yet online). A small sliver of Intimate Brands was spun out of Limited Inc. (NYSE:LTD - news) in 1995, but the parent still owns roughly 84% of the stock. The typical way to invest in Intimate Brands is simply buy its stock. That is the pure play way to buy this fine company. Another way to do it, however, is to buy the Limited. When you purchase a share of the Limited, you are effectively buying about 0.91 shares of Intimate Brands along with brands such as Limited, Express, Lane Bryant, and Structure. Based on the current prices, you are only paying about $1.50 for all the other brands within the Limited stable in addition to the market price for the Intimate Brands stake. There's no telling if or when the value of these other chains will be unlocked from the Limited. The company does, however, have a history of spinning off successful units. In 1996, the Limited sold a stake of superstar retailer Abercrombie & Fitch (NYSE:ANF - news) in an initial public offering (IPO). Last year, it followed up by shedding its remaining majority stake in that company via an exchange offer. If you are patient, the Limited will likely seek to take action to realize the value of all its units. While waiting, the sexy results from Intimate Brands will prop up both its own and the Limited's stock. fnews.yahoo.com victoriassecret.com fnews.yahoo.com After visiting one of the above sites, you just have to buy some stock, right? | ||||||||||||||
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