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EARNINGS ROUNDUP

Profits at Lowe's, Limited, Toys R Us Beat Forecasts

May 16, 2000|From Bloomberg News

NEW YORK — Lowe's Cos., Limited Inc. and Toys R Us Inc., three large U.S. retail chains, reported better-than-expected profits for the first quarter, boosted by a strong economy that's encouraging consumers to buy everything from appliances to clothes.

Net income at home improvement chain Lowe's rose 32%, while earnings jumped 41% at Limited. Toys R Us said its profit rose 41%, the first gain in more than two years, as new Chief Executive John Eyler implemented a plan to boost sales.

Limited did away with widespread price markdowns to boost profit, while Toys R Us focused on renovating stores and pushing exclusive toys to attract shoppers.

Lowe's, which trails rival Home Depot Inc. in sales, said net income rose to $187.1 million, or 49 cents a share, beating estimates by 3 cents, as sales rose 18% to $4.47 billion.

Limited's net income rose to $63 million, or 28 cents a share, beating analysts' estimates of 26 cents, according to First Call/Thomson Financial. Sales grew 5% to $2.11 billion.

Chief Executive Leslie Wexner eliminated widespread price markdowns on clothing and started targeting Limited's most frequent customers with promotions to bolster profit.

Increased demand for fashions at the company's Express chain also helped boost sales at stores open at least a year by 8%.

Same-store sales at Express stores rose 16%, while Limited stores gained 8%. At the Lerner New York unit, sales fell 3%, and at Structure they declined 4%.

A 29% jump in net income at Intimate Brands, of which Columbus, Ohio-based Limited owns about 84%, also boosted results.

Toys R Us' profit from operations rose to $24 million, or 10 cents a share, well above the 6 cents analysts expected. The Paramus, N.J.-based company's sales rose 7.1% to $2.32 billion.

CEO Eyler, who joined Toys R Us in January, is adding clothing to the toy stores, pushing exclusive products and keeping more top sellers in stock to woo shoppers lost to Wal-Mart Stores Inc. and other low-priced chains.

Lowe's shares rose $2.72 to close at $50.69, Toys R Us slipped 19 cents to close at $16.56 and Limited rose 50 cents to close at $50.13 on the New York Stock Exchange.

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