FOOL CONFERENCE CALL SYNOPSIS*
By Debora Tidwell (MF Debit)

The Limited, Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LTD)") else Response.Write("(NYSE: LTD)") end if %>
3 Limited Parkway
Columbus, OH 43230
(614) 479-7000

UNION CITY, CA (March 2, 1997)/FOOLWIRE/ --- The Limited, Inc. released their fourth quarter and fiscal year end results for 1996 on February 25th. Reported net sales for the quarter grew 13% to $2.966 billion from $2.636 billion in Q4 last year. Net income for the fourth quarter was $213 million and earnings per share were $0.78, an increase of 30% from pro forma $0.60 per share in 1995. Comp store sales increased 3% for the fourth quarter and year. For the full year, net income was $316 million (excluding a gain on the sale of subsidiary stock) or $1.12 per share, compared to pro forma $0.88 per share last year, an increase of 27%. The company also reported a $0.42 per share gain resulting from the successful public offering of approximately 16% of Abercrobie & Fitch (ANF) during the Fall season. Net sales were $8.645 billion for the year, an increase of 11% over 1995.

Fall inventory carryover is below last year. They have clean, well-positioned inventories in the businesses with the exception of Express, as they enter Spring. Express' inventory is clean, but not particularly well-positioned. That is an ongoing challenge right now and they see some activity moving forward into the second quarter. They are comfortable with First Call consensus estimates for the first quarter 1997, give or take a little, which is about flat versus a pro forma $0.08 per share last year.

EXPRESS DIVISION. Sales in the fourth quarter were $403.6 million and were $1.386 billion for the year. Fourth quarter comp store sales were -12% and for the year were -6%. Fourth quarter gross margins were down and margins for the year were down significantly. Operating income rate was down significantly for both the fourth quarter and full year. Operating income was also down significantly in terms of dollars for both the fourth quarter and full year. It was a very disappointing quarter and year for Express. Michael Weiss is at work positioning Express as a 20s fashion brand. Inventory levels are currently significantly below last year as they reposition orders and take markdowns to clear goods. So, they have two things going on here. They have lower inventory levels and they are not happy with the Spring position. They have a double compounding effect so we should expect negative comps in the near term -- significant negative comps in the first quarter, easing up to hopefully just mid-single-digit negative comps in the second quarter.

LERNER NEW YORK. Sales in the fourth quarter were $341.5 million and were $1.045 billion for the year. Fourth quarter comp store sales were +9% and for the year were +8%. Fourth quarter and full year gross margins were up significantly. Operating income rate was up significantly for both the fourth quarter and full year. Operating income was also up significantly in terms of dollars for both the fourth quarter and full year (for the year, it was more than a five-fold increase compared to the prior year). Lerner generated significant improvements in operating income in the fourth quarter, Fall season, and the full year. This was a welcome return of this business to almost historic profitability levels in the Fall season. They are hopeful that this momentum will continue into the Spring. As previously announced, Lerner plans to close about 80 stores this year, of which 23 closed in January and the balance will close in 1997.

LIMITED STORES. Sales in the fourth quarter were $252 million and were $855.6 million for the year. Fourth quarter comp store sales were +1% and for the year were +3%. Fourth quarter and full year gross margins were up significantly. Operating income rate was up significantly for the fourth quarter and showed a significant improvement for the full year. Operating income was also up significantly in terms of dollars for the fourth quarter and also showed a significant improvement for the full year. This year in the fourth quarter was a continuation of the improvement at Limited Stores but they are still short of their expectations. Clearly there is lots of work to be done. As previously announced, Limited Stores plans to close about 50 stores, 20 of which closed in January and the balance of which will close in 1997.

LANE BRYANT. Sales in the fourth quarter were $259.2 million and were $905.3 million for the year. Fourth quarter comp store sales were -1% and for the year were flat. Fourth quarter gross margins were up significantly and margins for the year were up. Operating income rate was up for both the fourth quarter and full year. Operating income was also up in terms of dollars for both the fourth quarter and full year. Lane Bryant increased their operating income by more than 30% for the full year and that was important. As previously announced, Lane Bryant plans to close about 45 stores this year, 2 of which occurred in January.

HENRI BENDEL. Sales in the fourth quarter were $24.6 million and were $90.8 million for the year. Fourth quarter comp store sales were -8% and for the year were -5%. Fourth quarter and full-year gross margins were down. Operating income rate was down significantly for both the fourth quarter and full year. Operating income was also down in terms of dollars for both the fourth quarter and full year. The bottom line on Bendel's is that they had merchandising and fashion misses. They have a lot of confidence in the new design team that came on board in the Fall and they should start to see the team's results roll through the business this Fall. There will be no new Bendel's stores opened in 1997.

WOMENS BUSINESSES OVERVIEW. Sales in the fourth quarter were $1.281 billion and were $4.282 billion for the year. Fourth quarter comp store sales were -2% and for the year were flat. Fourth quarter and full-year gross margins were flat. Operating income rate was up for the fourth quarter and up slightly for the full year. Operating income was also up in terms of dollars for both the fourth quarter and full year. At quarter end, beginning of 1997, the womens businesses inventory in total were down 6% per selling square foot and had less Fall carryover into the Spring season than a year ago. They are planning same store sales conservatively for the Spring, basically flat. It will be a negative at Express, positive at Lerner, slightly negative at Limited stores. The projection would be slight negative comps at the women's businesses and inventories would be flexing accordingly so they will see a slight improvement in turns to last year. The closings were done because the stores were losing money. But, also they represented malls that the company shouldn't be in, sales productivity was very low and was distorting their ability to run the business. They think they need to continue to prune the fleet back to a size and a real estate consistency that makes sense for the business going forward. Most of the stores that were closed were ones where leases were expiring. There will not be many carve-outs this year.

STRUCTURE STORES. Sales in the fourth quarter were $242.5 million and were $660 million for the year. Fourth quarter comp store sales were +8% and for the year were +7%. Fourth quarter and full-year gross margins were up significantly. Operating income rate was up significantly for both the fourth quarter and full year. Operating income was also up significantly in terms of dollars for both the fourth quarter and full year. The repositioning and structure that began in the Spring to a more American, youthful style has begun to yield results. They were pleased with Structure's $30+ million operating income improvements from last year.

LIMITED TOO. Sales in the fourth quarter were $93 million and were $258.8 million for the year. Fourth quarter comp store sales were +31% and for the year were +8%. Fourth quarter and full-year gross margins were up significantly. Operating income rate was up significantly for the fourth quarter and significantly improved for the full year. Operating income was also up significantly in terms of dollars for the fourth quarter and significantly improved for the full year. This was a very strong performance for Limited Too in the fourth quarter and for the Fall season. They demonstrated the magnitude of the turnaround of Limited Too by these facts: Their loss last Spring tied their previous record loss for a Spring season. Under new leadership this Fall they went on to a record-breaking Fall-season profit performance.

GALYAN'S. Sales in the fourth quarter were $50.8 million and were $108.2 million for the year. Fourth quarter comp store sales were +9% and for the year were +12%. Fourth quarter gross margins were up significantly and for the full year were also up. Operating income rate was flat for the fourth quarter and down for the full year. Operating income was also up in terms of dollars for the fourth quarter and was down for the full year. The reason the operating income was down for the year is the positioning of infrastructure for their future growth. All 3 of the new stores performed well and on plan and they have 2-3 stores planned for 1997 -- Columbus, Minneapolis, and possibly Chicago.

THE PENHALIGON TRANSACTION. Intimate Brands took a charge of $12 million pre-tax or $0.02 per equivalent Limited share in the fourth quarter in anticipation of the prospective sale of Penhaligon's. They expect to negotiate the definitive agreement and close the transaction in the near future. This is a positive move and eliminates annual operating losses of $2-3 million.

VICTORIA'S SECRET STORES. Sales in the fourth quarter were $540.5 million and were $1.45 billion for the year. Fourth quarter comp store sales were +5% and for the year were also +5%. Fourth quarter and full-year gross margins were up significantly. Operating income rate was up slightly for the fourth quarter and flat for the full year. Operating income was also up in terms of dollars for the fourth quarter and the full year.

VICTORIA'S SECRET CATALOG. Sales in the fourth quarter were $208.7 million and were $684.3 million for the year. Fourth quarter comp store sales were +8% and for the year were +5%. Fourth quarter gross margins were up significantly, but were down very slightly for the full year. Operating income rate was up significantly for the fourth quarter and down for the full year. Operating income was also up almost 30% in terms of dollars for the fourth quarter and down slightly for the full year.

CACIQUE. Sales in the fourth quarter were $28.7 million and were $87.9 million for the year. Fourth quarter comp store sales were +6% and for the year were +8%. Fourth quarter gross margins were up slightly and gross margins for the full year were up significantly. Operating income rate was flat for the fourth quarter and improved for the full year. Operating income was also about flat in terms of dollars for the fourth quarter and for the full year.

BATH & BODY WORKS. Sales in the fourth quarter were $374.8 million and were $753.2 million for the year. Fourth quarter comp store sales were +15% and for the year were +11%. Fourth quarter gross margins were up and gross margins for the full year were down slightly. Operating income rate was up for the fourth quarter and down slightly for the full year. Operating income was also up significantly in terms of dollars for the fourth quarter and for the full year.

SUMMARY FOR INTIMATE BRANDS BUSINESSES. Sales in the fourth quarter were $1.161 billion and were $2.997 billion for the year. Fourth quarter comp store sales were +8% and for the year were +7%. Fourth quarter and full-year gross margins were up significantly. Operating income rate was flat for the fourth quarter and for the full year. Operating income was also up in terms of dollars for the fourth quarter and up significantly for the full year. Intimate Brands led by strong performances at Bath & Body Works and Victoria's Secret stores again demonstrated market leadership with earnings per share increase of 24% over last year. This increase excludes the special non-recurring charge related to Penhaligon's.

ABERCROMBIE & FITCH. Sales in the fourth quarter were $139.2 million and were $335.4 million for the year. Fourth quarter comp store sales were +8% and for the year were +13%. Fourth quarter and full-year gross margins were up significantly. Operating income rate was up significantly for the fourth quarter and for the full year. Operating income was also up significantly in terms of dollars for the fourth quarter and almost doubled for the full year. At Abercrombie & Fitch they increased operating income by 93% for the year and 68% in the fourth quarter. Comparable store sales showed a solid performance for the year.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.