COLUMBUS, Ohio, Aug. 17, 2011 /PRNewswire/ -- Limited Brands,
Inc. (NYSE: LTD) today reported 2011 second quarter results.
(Logo: http://photos.prnewswire.com/prnh/20020520/CLM001LOGO
)
Leslie H. Wexner, chairman and
chief executive officer of Limited Brands, stated, "We're pleased
with our second quarter performance. Our focus on managing
inventory and expenses conservatively and staying agile yielded
more full-priced selling and record results. As we enter the
fall season, we will remain focused on our customers, and we see
opportunity to continue to do better."
Second Quarter Results
Adjusted earnings per share for the second quarter ended
July 30, 2011, were $0.48 compared to $0.36 for the quarter ended July 31, 2010, which exclude certain significant
items in both years as detailed below. Second quarter
adjusted operating income was $307.0
million compared to operating income of $236.5 million last year, and adjusted net income
was $150.7 million compared to
$120.6 million last year.
Including the 2011 and 2010 significant items detailed below,
reported second quarter earnings per share were $0.73 compared to $0.54 last year, operating income was
$193.5 million compared to
$236.5 million last year, and net
income was $231.2 million compared to
$178.7 million last year.
Significant items are as follows:
In 2011 (totaling to a benefit of $0.25 per share):
- A non-taxable gain of $147.1
million, or $0.47 per share,
and a pre-tax expense of $113.4
million, or $0.22 per share,
related to the charitable contribution of all of the company's
remaining shares of Express (NYSE: EXPR) to the Limited Brands
Foundation.
In 2010 (totaling to a benefit of $0.18 per share):
- A pre-tax gain of $52.3 million,
or $0.10 per share, related to the
sale of a portion of the company's shares of Express in its initial
public offering;
- A pre-tax gain of $19.7 million
and a related net tax benefit of $22.4
million, or $0.13 per share in
total, related to the sale of the company's remaining interest in
Limited Stores; and
- A pre-tax loss of $25.2 million,
or $0.05 per share, associated with
the early retirement of portions of the company's 2012 and 2014
maturity bonds.
The company reported a comparable store sales increase of 9
percent for the second quarter ended July
30, 2011, compared to the second quarter ended July 31, 2010. The company reported net
sales of $2.458 billion for the
second quarter ended July 30, 2011,
compared to sales of $2.243 billion
last year.
At the conclusion of this press release is a reconciliation of
reported to adjusted results.
2011 Outlook
The company stated that it expects 2011 third quarter earnings
per share to be $0.17 to $0.22
compared to record earnings per share of $0.18 per share last year. The company now
expects August comparable store sales to increase in the high
single digit range versus its previous guidance for a low single
digit increase.
For 2011, the company increased its adjusted earnings per share
forecast to $2.35 to $2.50 from
$2.25 to $2.45 previously.
Earnings Call Information
Limited Brands will conduct its second quarter earnings call at
9 a.m. Eastern on Thursday, August 18. 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 second 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, C.O. Bigelow, White
Barn Candle Co. and Henri Bendel, is
an international company. The company operates 2,626
specialty stores in the United
States and its brands are sold in more than 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.
Limited Brands b-roll footage of stores is available through our
online newsroom.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
Limited 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 second 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 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 second 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 international markets
and related risks;
- our independent licensees and franchisees;
- our direct channel business;
- 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 reliance on foreign sources of production, including risks
related to:
- political instability;
- duties, taxes, other charges on imports;
- legal and regulatory matters;
- volatility in currency exchange rates;
- local business practices and political issues;
- potential delays or disruptions in shipping and related pricing
impacts;
- the disruption of imports 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 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;
- 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
second quarter earnings call to reflect circumstances existing
after the date of this press release 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 2010 Annual Report on Form 10-K.
LIMITED
BRANDS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
THIRTEEN
WEEKS ENDED JULY 30, 2011 AND JULY 31, 2010
|
|
(Unaudited)
|
|
(In
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
Net Sales
|
$ 2,458,135
|
|
$ 2,242,510
|
|
Cost of Goods Sold, Buying and
Occupancy
|
(1,556,037)
|
|
(1,465,023)
|
|
Gross Profit
|
902,098
|
|
777,487
|
|
General, Administrative and
Store Operating Expenses
|
(708,565)
|
|
(541,030)
|
|
Operating Income
|
193,533
|
|
236,457
|
|
Interest Expense
|
(64,260)
|
|
(51,751)
|
|
Interest Income
|
339
|
|
605
|
|
Other Income
|
146,410
|
|
58,786
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
276,022
|
|
244,097
|
|
Provision for Income
Taxes
|
44,828
|
|
65,430
|
|
|
|
|
|
|
|
Net Income
|
$
231,194
|
|
$
178,667
|
|
|
|
|
|
|
|
Net Income Per Diluted
Share
|
$
0.73
|
|
$
0.54
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
314,800
|
|
333,742
|
|
|
|
|
|
|
LIMITED
BRANDS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
THIRTEEN
WEEKS ENDED JULY 30, 2011 AND JULY 31, 2010
|
|
(Unaudited)
|
|
(In
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Net Sales
|
$ 2,458,135
|
|
$
-
|
|
$ 2,458,135
|
|
$ 2,242,510
|
|
$
-
|
|
$ 2,242,510
|
|
Cost of Goods Sold,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buying &
Occupancy
|
(1,556,037)
|
|
-
|
|
(1,556,037)
|
|
(1,465,023)
|
|
-
|
|
(1,465,023)
|
|
Gross Profit
|
902,098
|
|
-
|
|
902,098
|
|
777,487
|
|
-
|
|
777,487
|
|
General, Administrative
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store Operating
Expenses
|
(708,565)
|
|
113,428
|
|
(595,137)
|
|
(541,030)
|
|
-
|
|
(541,030)
|
|
Operating Income
|
193,533
|
|
113,428
|
|
306,961
|
|
236,457
|
|
-
|
|
236,457
|
|
Interest Expense
|
(64,260)
|
|
-
|
|
(64,260)
|
|
(51,751)
|
|
-
|
|
(51,751)
|
|
Interest Income
|
339
|
|
-
|
|
339
|
|
605
|
|
-
|
|
605
|
|
Other (Expense)
Income
|
146,410
|
|
(147,053)
|
|
(643)
|
|
58,786
|
|
(46,689)
|
|
12,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
276,022
|
|
(33,625)
|
|
242,397
|
|
244,097
|
|
(46,689)
|
|
197,408
|
|
Provision for Income
Taxes
|
44,828
|
|
46,850
|
|
91,678
|
|
65,430
|
|
11,375
|
|
76,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
231,194
|
|
$
(80,475)
|
|
$
150,719
|
|
$
178,667
|
|
$
(58,064)
|
|
$
120,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Diluted
Share
|
$
0.73
|
|
|
|
$
0.48
|
|
$
0.54
|
|
|
|
$
0.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
314,800
|
|
|
|
314,800
|
|
333,742
|
|
|
|
333,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to
Consolidated Statements of Income and Reconciliation of Adjusted
Results for additional information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIMITED
BRANDS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
TWENTY-SIX
WEEKS ENDED JULY 30, 2011 AND JULY 31, 2010
|
|
(Unaudited)
|
|
(In
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
Net Sales
|
$ 4,675,152
|
|
$ 4,174,046
|
|
Cost of Goods Sold, Buying and
Occupancy
|
(2,931,326)
|
|
(2,702,301)
|
|
Gross Profit
|
1,743,826
|
|
1,471,745
|
|
General, Administrative and
Store Operating Expenses
|
(1,333,470)
|
|
(1,050,312)
|
|
Operating Income
|
410,356
|
|
421,433
|
|
Interest Expense
|
(118,928)
|
|
(112,871)
|
|
Interest Income
|
782
|
|
1,247
|
|
Other Income
|
232,455
|
|
121,114
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
524,665
|
|
430,923
|
|
Provision for Income
Taxes
|
128,300
|
|
139,756
|
|
|
|
|
|
|
|
Net Income
|
$
396,365
|
|
$
291,167
|
|
|
|
|
|
|
|
Net Income Per Diluted
Share
|
$
1.23
|
|
$
0.87
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
321,636
|
|
333,320
|
|
|
|
|
|
|
LIMITED
BRANDS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
TWENTY-SIX
WEEKS ENDED JULY 30, 2011 AND JULY 31, 2010
|
|
(Unaudited)
|
|
(In
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Net Sales
|
$ 4,675,152
|
|
$
-
|
|
$ 4,675,152
|
|
$ 4,174,046
|
|
$
-
|
|
$ 4,174,046
|
|
Cost of Goods Sold,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buying &
Occupancy
|
(2,931,326)
|
|
-
|
|
(2,931,326)
|
|
(2,702,301)
|
|
-
|
|
(2,702,301)
|
|
Gross Profit
|
1,743,826
|
|
-
|
|
1,743,826
|
|
1,471,745
|
|
-
|
|
1,471,745
|
|
General, Administrative
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store Operating
Expenses
|
(1,333,470)
|
|
163,428
|
|
(1,170,042)
|
|
(1,050,312)
|
|
-
|
|
(1,050,312)
|
|
Operating Income
|
410,356
|
|
163,428
|
|
573,784
|
|
421,433
|
|
-
|
|
421,433
|
|
Interest Expense
|
(118,928)
|
|
-
|
|
(118,928)
|
|
(112,871)
|
|
-
|
|
(112,871)
|
|
Interest Income
|
782
|
|
-
|
|
782
|
|
1,247
|
|
-
|
|
1,247
|
|
Other (Expense)
Income
|
232,455
|
|
(233,478)
|
|
(1,023)
|
|
121,114
|
|
(95,383)
|
|
25,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
524,665
|
|
(70,050)
|
|
454,615
|
|
430,923
|
|
(95,383)
|
|
335,540
|
|
Provision for Income
Taxes
|
128,300
|
|
45,765
|
|
174,065
|
|
139,756
|
|
(7,689)
|
|
132,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
396,365
|
|
$
(115,815)
|
|
$
280,550
|
|
$
291,167
|
|
$
(87,694)
|
|
$
203,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Diluted
Share
|
$
1.23
|
|
|
|
$
0.87
|
|
$
0.87
|
|
|
|
$
0.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
321,636
|
|
|
|
321,636
|
|
333,320
|
|
|
|
333,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 2011
In the second quarter of 2011, adjusted results exclude the
following:
- A $147.1 million non-taxable
gain, included in other income and expense, and associated pre-tax
expense of $113.4 million, included
in general, administrative and store operating expenses, associated
with our charitable contribution of Express, Inc. common stock to
The Limited Brands Foundation.
In the first quarter of 2011, adjusted results exclude the
following:
- An $86.4 million pre-tax gain
($55.6 million net of tax), included
in other income and expense, related to the sale of shares of
Express, Inc. common stock.
- A $50.0 million pre-tax expense
($31.2 million net of tax), included
in general, administrative and store operating expenses, related to
a pledge to The Limited Brands Foundation.
- An $11.0 million tax benefit
primarily related to the favorable resolution of certain discrete
income tax matters.
Fiscal 2010
In the second quarter of 2010, adjusted results exclude the
following:
- A $52.3 million pre-tax gain
($31.8M net of tax), included in
other income and expense, related to the initial public offering of
Express including the sale of a portion of the company’s shares.
- A $19.7 million pre-tax gain,
included in other income and expense, and a related net tax benefit
of $22.4 million, associated with the
sale of our remaining 25% interest in Limited Stores.
- A $25.2 million pre-tax loss
($15.8M net of tax), included in
other income and expense, associated with the early retirement of
portions of our 2012 and 2014 maturity bonds.
In the first quarter of 2010, adjusted results exclude the
following:
- A $48.7 million pre-tax gain
($29.6 million net of tax), included
in other income and expense, related to a $56.5 million cash distribution from
Express.
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.