[R]1:45PM New York –Longs Drugs surges on net income and sales increase. Limited first quarter net income rises on stake sale.[/R]

Longs Drug Stores Corporation, retail drug stores said first quarter revenues increased 8.5% to $1.41 billion compared to $1.30 billion for the same quarter of 2007. Net income increased $23.54 million or $0.65 per diluted share compared with $13.04 million or $0.34 per diluted share for the same period of year-ago.

Retail drug store sales increased 2.9% to $1.22 billion from $1.19 billion in the comparable period last year. Same-store sales increased 1% with pharmacy same-store sales increasing 0.5% and front-end same-store sales increasing 1.5%. Pharmacy sales were 52.4% of retail drug store sales during the period, consistent with the comparable period last year.

Pharmacy benefit services revenues increased 67.3% to $187.3 million from $112 million in the comparable period last year. Prescription drug plan revenues were $167.1 million compared with $96.6 million last year and pharmacy benefit management revenues were $20.2 million compared with $15.4 million a year ago.

Gross profit for the retail drug store for the quarter was $325.2 million or 26.7% sales were compared with $304 million or 25.6% sales were of last year. LIFO charge was increased from $3.5 million to $3 million.

Consolidated operating income was $39.5 million compared to $28 million for the quarter of 2007. Retail drug store operating income was $35.0 million compared with $23.4 million of last year.

Outlook

Longs estimates revenues to rise between 5% and 7% in the period of 52 weeks ending January 29, 2009 and total retail drug store sales will increase between 1% and 3% compared with the 53 weeks ended January 31, 2008. Same-store sales are expected to increase between 1% and 3%. Longs estimates income from continuing operations between $3.02 and $3.12 per diluted share in Fiscal 2009.

In the fiscal 2009, Longs Drugs plans to open or relocate approximately 20 to 30 stores and remodel up to 40 stores with the capital expenditure of $150 million to $200 million.

Longs Drug Stores Corporation, (LDG: chart), in the last one year of trading traded as low as $46.49 in Aug 2007 and $37.65 in April of 2008. In today’s trading stock surged $4.29 to $47.43.

Limited Brands, Inc., the retailer of women’s and men’s apparel reported sales decreased 17% to $1.9 billion from $2.3 billion for the same quarter of 2007. First quarter net income increased 49% to $97.8 million or $0.28 diluted earnings per share compared to $52.9 million or $0.13 for the quarter of last year.

Comparable store sales for the first quarter decreased 8%.

Operating income in the quarter increased to $209.4 million from $108.5 million and net gains on joint ventures were $109 million. Gross profit decreased to $641.12 million from $794.76 million. The quarterly results included net gain of 18 cents from the sale of stake in joint ventures.

The results contained pre-tax gain related to sale of joint venture stake $128 million ($81 million after-tax), or $0.24 per share; and pre-tax charge of $19 million ($19.6 million after-tax), or $0.06 per share, related to the impairment of the investment carrying value of another venture.

Weak 2008 earnings outlook

Second quarter earnings per share expected to be between $0.16 and $0.20 compared to $0.20 per share last year. The company estimates 2008 earnings between $1.38 and $1.58, excluding the first quarter one-time items of $0.18 per share.

The company operates a chain of 2,974 retail stores under the brand names Victoria''s Secret, Pink, Bath & Body Works, C.O. Bigelow, La Senza, White Barn Candle Co and Henri Bendel.

Limited Brands, Inc. stock (LTD: chart), in the last one year of trading fell as low as $14.51 in Mar 2008 and reached a high of $28.99 in July of 2007. In today’s trading the stock rose 80 cents to $19.10.