L Brands, Inc. (NYSE:LB) today reported record 2015 fourth quarter
and full-year results.
Leslie H. Wexner, chairman and chief executive
officer, commented, “We delivered record results in a year when
many retailers struggled. These results are a reflection of
the strength of our brands and were driven by tremendous focus and
execution across the enterprise. I am very optimistic heading
into 2016 and confident in our growth opportunities.”
Fourth Quarter ResultsEarnings
per share for the fourth quarter ended Jan. 30, 2016, increased 14%
to $2.15 from $1.89 for the quarter ended Jan. 31, 2015.
Fourth quarter operating income increased 13% to $1.078 billion
from $957.0 million last year. Net income increased 13% to
$636.0 million compared to $564.8 million last year.
Net sales for the fourth quarter ended Jan. 30,
2016, were $4.395 billion, an increase of 8% compared to $4.069
billion for the quarter ended Jan. 31, 2015. Comparable store
sales for the fourth quarter ended Jan. 30, 2016, increased
6%.
Full-Year ResultsAdjusted
earnings per share for the year ended Jan. 30, 2016, which exclude
a $78.1 million ($0.23 per share) first quarter pre-tax gain on the
sale of the company’s remaining interest in the third-party apparel
sourcing business, increased 14% to $3.99 compared to $3.50 for the
year ended Jan. 31, 2015. Full-year operating income
increased 12% to $2.192 billion compared to $1.953 billion last
year, and adjusted net income was $1.184 billion compared to $1.042
billion last year.
Including the gain from the sale of the sourcing business
mentioned above, reported full-year earnings per share were $4.22
compared to $3.50 last year, and net income was $1.253 billion
compared to $1.042 billion last year.
Net sales for the year ended Jan. 30, 2016, were
$12.154 billion, an increase of 6% compared to $11.454 billion for
the year ended Jan. 31, 2015. Comparable store sales for the
year ended Jan. 30, 2016, increased 5%.
2016 OutlookThe company
currently expects 2016 full-year earnings per share to be between
$3.90 and $4.10, including earnings per share between $0.50 and
$0.55 in the first quarter. The 2016 earnings per share
forecast includes negative impacts related to continued pressure
from foreign currency exchange rates and incremental interest
expense related to the $1 billion October 2015 note issuance.
The company expects to report a mid-single digit
increase in February comparable store sales, above expectations for
a low-single digit increase, reflecting a mid-single digit increase
at both Victoria’s Secret and Bath & Body Works.
Beginning with the February 2016 sales report,
the company will include direct sales in comparable store sales
results, consistent with industry practice.
Earnings Call and Additional
InformationL Brands will conduct its fourth quarter
earnings call at 9 a.m. Eastern on Feb. 25. To listen, call
1-866-363-4673 (international dial-in number:
1-973-200-3978). For an audio replay, call 1-855-859-2056
(conference ID 33156271) (international replay number:
1-404-537-3406 (conference ID 33156271)) or log onto
www.LB.com. Additional fourth quarter and full-year financial
information is also available at www.LB.com.
ABOUT L BRANDS:L Brands, through
Victoria’s Secret, PINK, Bath & Body Works, La Senza and Henri
Bendel, is an international company. The company operates
3,005 company-owned specialty stores in the United States, Canada
and the United Kingdom, and its brands are sold in more than 700
additional noncompany-owned locations worldwide. 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 fourth 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 fourth 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
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 franchise, license and
wholesale partners;
- 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;
- disruption due to labor disputes; and
- changing expectations regarding product safety due to new
legislation;
- fluctuations in foreign currency exchange rates;
- 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-related 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 maintain the security of customer, associate,
supplier or company information;
- 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
fourth quarter earnings call to reflect circumstances existing
after the date of this press release or the fourth quarter earnings
call 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 2014 Annual
Report on Form 10-K.
L BRANDSFOURTH QUARTER
2015
Comparable Store Sales Increase (Decrease):
|
|
Fourth Quarter |
|
Year |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
Victoria’s Secret
Stores1 |
|
|
5 |
% |
|
|
4 |
% |
|
|
5 |
% |
|
|
3 |
% |
Bath & Body
Works1 |
|
|
6 |
% |
|
|
8 |
% |
|
|
5 |
% |
|
|
6 |
% |
L
Brands |
|
|
6 |
% |
|
|
6 |
% |
|
|
5 |
% |
|
|
4 |
% |
Victoria’s
Secret Direct Sales |
|
|
15 |
% |
|
|
(2 |
%) |
|
|
3 |
% |
|
|
(1 |
%) |
1 – Results include company-owned stores in the United States
and Canada.
Total Sales (Millions):
|
Fourth Quarter |
|
Year-to-Date |
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
Victoria’s Secret
Stores1 |
$ |
2,047.2 |
|
|
$ |
1,914.2 |
|
|
$ |
6,112.5 |
|
|
$ |
5,700.2 |
|
Victoria’s Secret
Direct |
|
567.1 |
|
|
|
492.1 |
|
|
|
1,559.6 |
|
|
|
1,507.4 |
|
Total Victoria’s
Secret |
$ |
2,614.3 |
|
|
$ |
2,406.3 |
|
|
$ |
7,672.1 |
|
|
$ |
7,207.6 |
|
Bath & Body
Works1 |
$ |
1,361.8 |
|
|
$ |
1,276.7 |
|
|
$ |
3,225.0 |
|
|
$ |
3,047.8 |
|
Bath & Body Works
Direct |
|
157.8 |
|
|
|
127.3 |
|
|
|
361.6 |
|
|
|
301.8 |
|
Total Bath &
Body Works |
$ |
1,519.6 |
|
|
$ |
1,404.0 |
|
|
$ |
3,586.6 |
|
|
$ |
3,349.6 |
|
VS & BBW
International2 |
$ |
112.3 |
|
|
$ |
105.5 |
|
|
$ |
385.2 |
|
|
$ |
335.9 |
|
Other3 |
$ |
148.8 |
|
|
$ |
152.9 |
|
|
$ |
509.9 |
|
|
$ |
561.0 |
|
L
Brands |
$ |
4,395.0 |
|
|
$ |
4,068.7 |
|
|
$ |
12,153.8 |
|
|
$ |
11,454.1 |
|
1 – Results include company-owned stores in the United States
and Canada.2 – Results include retail sales from company-owned
stores outside of the United States and Canada and royalty and
wholesale sales associated with partner-operated stores.3 – Results
include La Senza, Henri Bendel and Mast external sales.
Total Company-Owned Stores:
|
|
Stores |
|
|
|
|
Stores |
|
|
Operating |
|
|
|
|
Operating |
|
|
at 1/31/15 |
Opened |
Closed |
at 1/30/16 |
|
|
|
|
|
|
Victoria's Secret
U.S. |
|
983 |
12 |
|
(5 |
) |
990 |
PINK U.S. |
|
115 |
16 |
|
(3 |
) |
128 |
Victoria's Secret
Canada |
|
31 |
6 |
|
- |
|
37 |
PINK Canada |
|
10 |
- |
|
(1 |
) |
9 |
Total Victoria’s
Secret |
|
1,139 |
34 |
|
(9 |
) |
1,164 |
|
|
|
|
|
|
Bath & Body Works
U.S. |
|
1,558 |
23 |
|
(7 |
) |
1,574 |
Bath & Body Works
Canada |
|
88 |
10 |
|
- |
|
98 |
Total Bath &
Body Works |
|
1,646 |
33 |
|
(7 |
) |
1,672 |
|
|
|
|
|
|
Victoria’s Secret
U.K. |
|
8 |
4 |
|
- |
|
12 |
PINK U.K. |
|
2 |
- |
|
- |
|
2 |
Henri Bendel |
|
29 |
- |
|
- |
|
29 |
La Senza Canada |
|
145 |
1 |
|
(20 |
) |
126 |
Total L Brands
Stores |
|
2,969 |
72 |
|
(36 |
) |
3,005 |
Total Noncompany-Owned Stores:
|
|
Stores |
|
|
|
|
Stores |
|
|
Operating |
|
|
|
|
Operating |
|
|
at 1/31/15 |
Opened |
Closed |
at 1/30/16 |
|
|
|
|
|
|
Victoria’s Secret Beauty
& Accessories |
|
290 |
88 |
|
(5 |
) |
373 |
Victoria’s Secret |
|
13 |
3 |
|
- |
|
16 |
PINK |
|
1 |
2 |
|
- |
|
3 |
Bath & Body Works |
|
80 |
47 |
|
(2 |
) |
125 |
La Senza |
|
266 |
5 |
|
(50 |
) |
221 |
Total |
|
650 |
145 |
|
(57 |
) |
738 |
|
|
|
|
|
|
L BRANDS, INC. AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF
INCOME |
|
THIRTEEN WEEKS ENDED JANUARY 30, 2016 AND
JANUARY 31, 2015 |
|
(Unaudited) |
|
(In thousands except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
2014 |
|
|
|
Net Sales |
$ |
4,395,039 |
|
|
$ |
4,068,685 |
|
|
|
Costs of Goods Sold, Buying and Occupancy |
|
(2,392,626 |
) |
|
|
(2,233,914 |
) |
|
|
Gross Profit |
|
2,002,413 |
|
|
|
1,834,771 |
|
|
|
General,
Administrative and Store Operating Expenses |
|
(924,435 |
) |
|
|
(877,818 |
) |
|
|
Operating Income |
|
1,077,978 |
|
|
|
956,953 |
|
|
|
Interest Expense |
|
(97,151 |
) |
|
|
(77,744 |
) |
|
|
Other Income |
|
1,274 |
|
|
|
337 |
|
|
|
|
|
|
|
|
|
|
Income
Before Income Taxes |
|
982,101 |
|
|
|
879,546 |
|
|
|
Provision for Income Taxes |
|
346,084 |
|
|
|
314,733 |
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
636,017 |
|
|
$ |
564,813 |
|
|
|
|
|
|
|
|
|
|
Net Income Per Diluted Share |
$ |
2.15 |
|
|
$ |
1.89 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding |
|
295,174 |
|
|
|
299,040 |
|
|
|
|
|
|
|
|
|
|
L BRANDS, INC. AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF
INCOME |
|
FIFTY-TWO WEEKS ENDED JANUARY 30, 2016 AND
JANUARY 31, 2015 |
|
(Unaudited) |
|
(In thousands except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
2014 |
|
|
Net Sales |
$ |
12,153,789 |
|
|
$ |
11,454,078 |
|
|
Costs of Goods Sold, Buying and Occupancy |
|
(6,950,299 |
) |
|
|
(6,646,427 |
) |
|
Gross Profit |
|
5,203,490 |
|
|
|
4,807,651 |
|
|
General,
Administrative and Store Operating Expenses |
|
(3,011,981 |
) |
|
|
(2,854,531 |
) |
|
Operating Income |
|
2,191,509 |
|
|
|
1,953,120 |
|
|
Interest Expense |
|
(333,739 |
) |
|
|
(324,042 |
) |
|
Other Income |
|
76,609 |
|
|
|
6,653 |
|
|
|
|
|
|
|
|
Income
Before Income Taxes |
|
1,934,379 |
|
|
|
1,635,731 |
|
|
Provision for Income Taxes |
|
681,387 |
|
|
|
593,771 |
|
|
|
|
|
|
|
|
Net Income |
$ |
1,252,992 |
|
|
$ |
1,041,960 |
|
|
|
|
|
|
|
|
Net Income Per Diluted Share |
$ |
4.22 |
|
|
$ |
3.50 |
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding |
|
296,788 |
|
|
|
297,960 |
|
|
|
|
|
|
|
|
L BRANDS, INC. AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF
INCOME |
|
FIFTY-TWO WEEKS ENDED JANUARY 30, 2016 AND
JANUARY 31, 2015 |
|
(Unaudited) |
|
(In thousands except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported |
|
Adjustments |
|
Adjusted |
|
Reported |
|
|
Net Sales |
$ |
12,153,789 |
|
|
$ |
- |
|
|
$ |
12,153,789 |
|
|
$ |
11,454,078 |
|
|
|
Costs of Goods Sold, Buying & Occupancy |
|
(6,950,299 |
) |
|
|
|
|
(6,950,299 |
) |
|
|
(6,646,427 |
) |
|
|
Gross Profit |
|
5,203,490 |
|
|
|
- |
|
|
|
5,203,490 |
|
|
|
4,807,651 |
|
|
|
General,
Administrative and Store Operating Expenses |
|
(3,011,981 |
) |
|
|
|
|
(3,011,981 |
) |
|
|
(2,854,531 |
) |
|
|
Operating Income |
|
2,191,509 |
|
|
|
- |
|
|
|
2,191,509 |
|
|
|
1,953,120 |
|
|
|
Interest Expense |
|
(333,739 |
) |
|
|
- |
|
|
|
(333,739 |
) |
|
|
(324,042 |
) |
|
|
Other Income |
|
76,609 |
|
|
|
(78,057 |
) |
|
|
(1,448 |
) |
|
|
6,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Before Income Taxes |
|
1,934,379 |
|
|
|
(78,057 |
) |
|
|
1,856,322 |
|
|
|
1,635,731 |
|
|
|
Provision for Income Taxes |
|
681,387 |
|
|
|
(9,079 |
) |
|
|
672,308 |
|
|
|
593,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
$ |
1,252,992 |
|
|
$ |
(68,978 |
) |
|
$ |
1,184,014 |
|
|
$ |
1,041,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Diluted Share |
$ |
4.22 |
|
|
|
|
$ |
3.99 |
|
|
$ |
3.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding |
|
296,788 |
|
|
|
|
|
296,788 |
|
|
|
297,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Statements of Income and
Reconciliation of Adjusted Results for additional information. |
|
L 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 2015
In the second, third and fourth quarters of 2015, there were no
adjustments to results.
In the first quarter of 2015, adjusted results exclude the
following:
- A $78.1 million pre-tax gain ($69.0 million net of tax)
included in other income, related to the sale of our remaining
interest in the third-party apparel sourcing business.
Fiscal 2014
In the first, second, third and fourth quarters of 2014, 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.
For further information, please contact:
L Brands:
Investor Relations
Amie Preston
(614) 415-6704
apreston@lb.com
Media Relations
Tammy Roberts Myers
(614) 415-7072
communications@lb.com
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