COLUMBUS, Ohio, Nov. 20, 2013 /PRNewswire/ -- Limited Brands,
Inc. (now known as L Brands, Inc.) (NYSE: LTD) today reported 2013
third quarter results and increased its 2013 full-year earnings
guidance.
(Logo:
http://photos.prnewswire.com/prnh/20020520/CLM001LOGO)
Third Quarter Results
Earnings per share for the third
quarter ended Nov. 2, 2013 increased
19% to $0.31 compared to adjusted
earnings per share of $0.26 for the
third quarter ended Oct. 27,
2012.
Third quarter operating income was $211.0
million compared to adjusted operating income of
$197.4 million last year, and net
income was $92.0 million compared to
adjusted net income of $75.6 million
last year. Adjusted results in 2012 exclude certain significant
items as detailed below:
- In 2012 (totaling to a charge of $0.01 per share):
- A pre-tax charge of $10.4
million, or $0.04 per share,
related to La Senza store closures; and
- A pre-tax gain of $12.7 million,
or $0.03 per share, from cash
distributions related to the company's Easton investments.
Including the significant items above, reported 2012 third
quarter earnings per share were $0.25; operating income was $186.9 million; and net income was $73.4 million.
The company reported net sales of $2.171
billion for the third quarter ended Nov. 2, 2013, an increase of 6 percent compared
to net sales of $2.050 billion for
the third quarter ended Oct. 27,
2012. The company reported a comparable store sales increase
of 3 percent for the 13 weeks ended Nov. 2,
2013, compared to the 13 weeks ended Nov. 3, 2012.
At the conclusion of this press release is a reconciliation of
reported to adjusted results.
2013 Outlook
The company stated that it expects fourth
quarter earnings of $1.67 to $1.82
per share. For 2013, the company expects earnings per share
of $3.07 to $3.22. The fourth
quarter projection includes incremental interest expense of
approximately $0.02 per share related
to the $500 million notes issued in
October, which was not included in the company's previous
forecast.
Earnings Call Information
Limited Brands will conduct
its third quarter earnings call at 9 a.m.
Eastern time on Thursday, Nov. 21. To listen, call
1-866-583-6618 (international dial-in number:
1-937-200-3978). For an audio replay, call 1-866-NEWS-LTD
(international replay number: 1-706-902-3452) or log onto
www.Limitedbrands.com. Additional third quarter financial
information is also available at www.Limitedbrands.com.
ABOUT LIMITED BRANDS:
Limited Brands, through
Victoria's Secret, Pink, Bath & Body Works, La Senza and
Henri Bendel, is an international
company. The company operates 2,655 specialty stores in
the United States and its brands
are sold in about 800 company-operated and franchised additional
locations world-wide. The company's products are also
available online at www.VictoriasSecret.com,
www.BathandBodyWorks.com, www.HenriBendel.com and
www.LaSenza.com.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
L Brands, Inc. cautions that any
forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) contained in this press
release or the third quarter earnings call involve risks and
uncertainties and are subject to change based on various factors,
many of which are beyond our control. Accordingly, our future
performance and financial results may differ materially from those
expressed or implied in any such forward-looking statements. Words
such as "estimate," "project," "plan," "believe," "expect,"
"anticipate," "intend," "planned," "potential" and any similar
expressions may identify forward-looking statements. Risks
associated with the following factors, among others, in some cases
have affected and in the future could affect our financial
performance and actual results and could cause actual results to
differ materially from those expressed or implied in any
forward-looking statements included in this press release or the
third quarter earnings call:
- general economic conditions, consumer confidence, consumer
spending patterns and market disruptions including severe weather
conditions, natural disasters, health hazards, terrorist
activities, financial crises, political crises or other major
events, or the prospect of these events;
- the seasonality of our business;
- the dependence on a high volume of mall traffic and the
possible lack of availability of suitable store locations on
appropriate terms;
- our ability to grow through new store openings and existing
store remodels and expansions;
- our ability to successfully expand into global markets and
related risks;
- our relationships with independent licensees and
franchisees;
- our direct channel businesses;
- our failure to protect our reputation and our brand
images;
- our failure to protect our trade names, trademarks and
patents;
- the highly competitive nature of the retail industry generally
and the segments in which we operate particularly;
- consumer acceptance of our products and our ability to keep up
with fashion trends, develop new merchandise and launch new product
lines successfully;
- our ability to source, distribute and sell goods and materials
on a global basis, including risks related to:
- political instability;
- duties, taxes and other charges;
- legal and regulatory matters;
- volatility in currency exchange rates;
- local business practices and political issues;
- potential delays or disruptions in shipping and transportation
and related pricing impacts;
- the disruption of production or distribution by labor disputes;
and
- changing expectations regarding product safety due to new
legislation;
- stock price volatility;
- our failure to maintain our credit rating;
- our ability to service or refinance our debt;
- our ability to retain key personnel;
- our ability to attract, develop and retain qualified employees
and manage labor costs;
- the inability of our manufacturers to deliver products in a
timely manner and meet quality standards;
- fluctuations in product input costs;
- fluctuations in energy costs;
- increases in the costs of mailing, paper and printing;
- claims arising from our self-insurance;
- our ability to implement and maintain information technology
systems and to protect associated data;
- our failure to comply with regulatory requirements;
- tax matters; and
- legal and compliance matters.
We are not under any obligation and do not intend to make
publicly available any update or other revisions to any of the
forward-looking statements contained in this press release or the
third quarter earnings call to reflect circumstances existing after
the date of this report or to reflect the occurrence of future
events even if experience or future events make it clear that any
expected results expressed or implied by those forward-looking
statements will not be realized. Additional information
regarding these and other factors can be found in "Item 1A. Risk
Factors" in our 2012 Annual Report on Form 10-K.
LIMITED BRANDS, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
THIRTEEN WEEKS ENDED NOVEMBER 2, 2013
AND OCTOBER 27, 2012 (Unaudited) (In thousands except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
Net Sales
|
$
2,171,087
|
|
$
2,050,189
|
Cost of Goods Sold,
Buying and Occupancy
|
(1,314,378)
|
|
(1,225,063)
|
Gross
Profit
|
856,709
|
|
825,126
|
General,
Administrative and Store Operating Expenses
|
(645,683)
|
|
(638,178)
|
Operating
Income
|
211,026
|
|
186,948
|
Interest
Expense
|
(76,840)
|
|
(77,155)
|
Other
Income
|
7,238
|
|
17,603
|
|
|
|
|
Income Before Income
Taxes
|
141,424
|
|
127,396
|
Provision for Income
Taxes
|
49,440
|
|
54,036
|
|
|
|
|
Net
Income
|
$
91,984
|
|
$
73,360
|
|
|
|
|
Net Income Per
Diluted Share
|
$
0.31
|
|
$
0.25
|
|
|
|
|
Weighted Average
Shares Outstanding
|
296,544
|
|
294,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIMITED BRANDS,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
THIRTEEN WEEKS
ENDED NOVEMBER 2, 2013 AND OCTOBER 27, 2012
|
(Unaudited)
|
(In thousands
except per share amounts)
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|
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|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Net Sales
|
$
2,171,087
|
|
$
2,050,189
|
|
$
-
|
|
$
2,050,189
|
Cost of Goods
Sold,
|
|
|
|
|
|
|
|
|
Buying &
Occupancy
|
(1,314,378)
|
|
(1,225,063)
|
|
10,437
|
|
(1,214,626)
|
Gross
Profit
|
856,709
|
|
825,126
|
|
10,437
|
|
835,563
|
General,
Administrative and
|
|
|
|
|
|
|
|
|
Store Operating
Expenses
|
(645,683)
|
|
(638,178)
|
|
-
|
|
(638,178)
|
Operating
Income
|
211,026
|
|
186,948
|
|
10,437
|
|
197,385
|
Interest
Expense
|
(76,840)
|
|
(77,155)
|
|
-
|
|
(77,155)
|
Other
Income
|
7,238
|
|
17,603
|
|
(12,745)
|
|
4,858
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
141,424
|
|
127,396
|
|
(2,308)
|
|
125,088
|
Provision for Income
Taxes
|
49,440
|
|
54,036
|
|
(4,588)
|
|
49,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
91,984
|
|
$
73,360
|
|
$
2,280
|
|
$
75,640
|
|
|
|
|
|
|
|
|
|
Net Income Per
Diluted Share
|
$
0.31
|
|
$
0.25
|
|
|
|
$
0.26
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding
|
296,544
|
|
294,386
|
|
|
|
294,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to
Consolidated Statements of Income and Reconciliation of Adjusted
Results
for additional information.
|
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|
LIMITED BRANDS,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
THIRTY NINE WEEKS
ENDED NOVEMBER 2, 2013 AND OCTOBER 27, 2012
|
(Unaudited)
|
(In thousands
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
2013
|
|
2012
|
Net Sales
|
$
6,954,997
|
|
$
6,603,068
|
Cost of Goods Sold,
Buying and Occupancy
|
(4,168,252)
|
|
(3,933,506)
|
Gross
Profit
|
2,786,745
|
|
2,669,562
|
General,
Administrative and Store Operating Expenses
|
(1,906,733)
|
|
(1,884,050)
|
Operating
Income
|
880,012
|
|
785,512
|
Interest
Expense
|
(232,181)
|
|
(234,473)
|
Other
Income
|
|
11,243
|
|
19,041
|
|
|
|
|
|
Income Before Income
Taxes
|
659,074
|
|
570,080
|
Provision for Income
Taxes
|
245,674
|
|
228,513
|
|
|
|
|
|
Net
Income
|
$
413,400
|
|
$
341,567
|
|
|
|
|
|
Net Income Per
Diluted Share
|
$
1.40
|
|
$
1.15
|
|
|
|
|
|
Weighted Average
Shares Outstanding
|
295,734
|
|
297,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIMITED BRANDS,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
THIRTY NINE WEEKS
ENDED NOVEMBER 2, 2013 AND OCTOBER 27, 2012
|
(Unaudited)
|
(In thousands
except per share amounts)
|
|
|
|
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|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
Net Sales
|
$
6,954,997
|
|
|
$
6,603,068
|
|
$
-
|
|
$
6,603,068
|
Cost of Goods
Sold,
|
|
|
|
|
|
|
|
|
|
Buying &
Occupancy
|
(4,168,252)
|
|
|
(3,933,506)
|
|
13,237
|
|
(3,920,269)
|
Gross
Profit
|
2,786,745
|
|
|
2,669,562
|
|
13,237
|
|
2,682,799
|
General,
Administrative and
|
|
|
|
|
|
|
|
|
|
Store Operating
Expenses
|
(1,906,733)
|
|
|
(1,884,050)
|
|
800
|
|
(1,883,250)
|
Operating
Income
|
880,012
|
|
|
785,512
|
|
14,037
|
|
799,549
|
Interest
Expense
|
(232,181)
|
|
|
(234,473)
|
|
-
|
|
(234,473)
|
Other
Income
|
11,243
|
|
|
19,041
|
|
(12,745)
|
|
6,296
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
659,074
|
|
|
570,080
|
|
1,292
|
|
571,372
|
Provision for Income
Taxes
|
245,674
|
|
|
228,513
|
|
(4,588)
|
|
223,925
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
$
413,400
|
|
|
$
341,567
|
|
$
5,880
|
|
$
347,447
|
|
|
|
|
|
|
|
|
|
|
Net Income Per
Diluted Share
|
$
1.40
|
|
|
$
1.15
|
|
|
|
$
1.17
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding
|
295,734
|
|
|
297,218
|
|
|
|
297,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
See Notes to
Consolidated Statements of Income and Reconciliation of Adjusted
Results for additional information.
|
|
|
|
|
|
|
|
|
|
|
LIMITED BRANDS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED STATEMENTS OF INCOME
AND
RECONCILIATION OF ADJUSTED
RESULTS
(Unaudited)
The "Adjusted Results" provided in the attached unaudited
Consolidated Statements of Income and Reconciliation of Adjusted
Results are non-GAAP financial measures and reflect the
following:
Fiscal 2013
In the first, second and third quarter of 2013, there were no
adjustments to results.
Fiscal 2012
In the third quarter of 2012, adjusted results exclude the
following:
- $10.4 million ($10.4 million net of tax) of store closure costs
at La Senza.
- A $12.7 million pre-tax gain
($8.2 million net of tax), included
in other income, from $13.4 million
of cash distributions related to the company's Easton
investments.
In the second quarter of 2012, adjusted results exclude the
following:
- $3.6 million ($3.6 million net of tax) of store closure costs
at La Senza.
In the first quarter of 2012, there were no adjustments to
results.
The Unaudited Adjusted Consolidated Statements of Income should
not be construed as an alternative to the reported results
determined in accordance with generally accepted accounting
principles. Further, the Company's definition of adjusted
income information may differ from similarly titled measures used
by other companies. While it is not possible to predict
future results, management believes the adjusted information is
useful for the assessment of the ongoing operations of the Company.
The Unaudited Adjusted Consolidated Statements of Income should be
read in conjunction with the Company's historical financial
statements and notes thereto contained in the Company's quarterly
reports on Form 10-Q and annual report on Form 10-K.
SOURCE Limited Brands, Inc.