Limited Brands Inc. (LTD) Monday reported a 76 percent drop in first-quarter profit because of dismal sales at its Express clothing chain as a focus on older shoppers backfired, and warned that second-quarter earnings would miss Wall Street expectations.

The retailer, whose stores also include lingerie chain Victoria's Secret (search) and Bath & Body Works (search), said it alienated its traditional Express customers by aiming for older shoppers and raising prices. It said it was focused on being "young and sexy" again.

"Obviously we're very disappointed with our first-quarter performance," Len Schlesinger, vice chairman and chief operating officer, said on a conference call. "We're embarrassed by the performance at Express."

The retailer, which brought in a new apparel manager in January, said it hoped to fix fashion mistakes in time for the fall season but clothing sales at Express would remain very weak in the second quarter, hurting profits.

Limited's shares were down 2.1 percent on the New York Stock Exchange (search).

Limited earned $23.1 million, or 6 cents per share, in the first quarter ended April 30. That compared with $96.6 million, or 19 cents per share, a year earlier, including a gain of 6 cents a share related to the November 2002 sale of New York & Co.

Analysts, on average, expected profit of 9 cents per share, according to Reuters Estimates.

Mark Montagna, retail analyst with Wells Fargo Securities, said Limited's second-half prospects look better than the first but it was too soon to be confident that the retailer will fix its merchandise mistakes.

He said Limited will have an easier time beating last year's weak second-half sales performance, but he would wait to see what the clothing looks like in stores before advising clients that the apparel problems were solved.

Net sales in the first quarter dipped to $1.975 billion, from $1.978 billion a year earlier. Sales at stores open at least a year -- a key retail measure known as same-store sales -- fell 5 percent.

Emme Kozloff, retail analyst with Sanford Bernstein, said the Express chain lost twice as much money in the first quarter as it made in all of last year. She said the first and fourth quarters are typically the only profitable periods in the year, and questioned whether Express could break even this year.

"We got fashion wrong," Express President Paul Raffin said. "We drifted older and we drifted more expensive and in fact alienated a large percentage of our total customers. Right now our goal is to win those customers back."

The Columbus, Ohio-based retailer said it expects second-quarter earnings in the range of 23 cents to 25 cents per share. Analysts, on average, expected 29 cents per share, according to Reuters Estimates.

The Victoria's Secret chain also posted weaker-than-expected results in the first quarter. The retailer acknowledged earlier this month that its newly launched IPEX bra did not sell as well as expected, but the biggest hit came from weak demand for panties and sleepwear.

The lingerie chain stocked too much revealing v-string and thong underwear, and not enough "covered bottom" styles, said Grace Nichols, chief executive of Victoria's Secret.

For the full year, it forecast earnings of about $1.41 per share, below Wall Street expectations for $1.51 per share.

The retailer also said it had completed a $100 million share repurchase program, and authorized another $100 million buyback.

Limited shares were off 41 cents at $20.02 on the NYSE.