Oct. 6--After months of declining sales, the retail sector received a bit of good news yesterday when an analyst raised the outlook for Columbus-based Limited Brands.

Thomas Filandro of Susquehanna Financial Group raised the target price for the retailer's shares to $22 from $17 and predicted the company will lose 7 cents per share in the third quarter, at the low end of the 7-to-12-cent range Limited management had predicted.

The news sent company shares up 7.75 percent, or $1.25, to $17.38. That places Limited shares close to their 52-week high of $17.73.

Filandro expects the Limited's fortunes to benefit from a better performance at Bath and Body Works, which he predicts will show a slight increase in same-store sales for September. The analyst also sees same-store sales at Victoria's Secret stores improving, although not as much.

Limited Brands doesn't comment on analysts' forecasts, a spokeswoman said. The company will announce September sales figures on Thursday.

If the company's sales report does beat expectations, it would be the second month in a row. The company reported same-store sales for August slipped 4 percent, but the results were better than the 5.9 percent decline analysts expected.

In recent days, analysts also have upgraded their views of another Columbus-based retailer. A JPMorgan Chase analyst raised his rating on Big Lots last week to "overweight" from "neutral," saying that a wide range of merchants are seeing increasing sales in the third quarter. Shares of DSW and Retail Ventures also have climbed in recent months.

Several factors are helping to push retailers' fortunes higher, analyst Kimberly Greenberger of Citigroup Global said in a note to investors.

"We believe September benefits from this year's later Labor Day (Sept. 7 compared with Sept. 1 last year), later back-to-school starts, and customers buying closer to need (likely shifting some sales out of August into September)," Greenberger wrote.

Perhaps more important, retail-sales comparisons also should benefit from the fact that retailers last month didn't have to deal with September 2008's double whammy of the banking crisis and tropical storms, which kept consumers from going to malls.

With the stock market and weather in better shape last month compared with a year ago, Greenberger predicted that same-store sales figures for retailers should be flat in September, an improvement over the decline of 1.1 percent in August and the 2 percent to 3 percent decline from May through July.

A flat September would represent the strongest performance since a 2.1 percent upswing in April 2008.

tferan@dispatch.com

-----

To see more of The Columbus Dispatch, or to subscribe to the newspaper, go to http://www.columbusdispatch.com.

Copyright (c) 2009, The Columbus Dispatch, Ohio

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:LTD, NYSE:JPM, NYSE:BIG, NYSE:RVI,

A service of YellowBrix, Inc.