COLUMBUS, Ohio, Nov. 16, 2011 /PRNewswire/ -- Limited Brands,
Inc. (NYSE: LTD) today reported 2011 third quarter results and
increased its 2011 full-year earnings guidance.
(Logo:
http://photos.prnewswire.com/prnh/20020520/CLM001LOGO )
Third Quarter Results
Adjusted earnings per share for the third quarter ended
Oct. 29, 2011 increased 39% to
$0.25 compared to earnings per share
of $0.18 for the quarter ended
Oct. 30, 2010, which exclude an
income tax benefit in 2011 as detailed below. Third quarter
operating income was $186.1 million
compared to operating income of $149.1
million last year, and adjusted net income was $77.6 million compared to net income of
$61.3 million last year.
The 2011 adjusted results above exclude an income tax benefit,
primarily due to the resolution of certain tax matters, of
$16.7 million, or $0.06 per share. Including this benefit,
2011 net income was $94.3 million and
earnings per share were $0.31.
Comparable store sales for the third quarter increased 9
percent, and net sales were $2.173
billion compared to $1.983
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 adjusted fourth quarter
earnings of $1.28 to $1.43 per share.
For 2011, the company increased its adjusted earnings per
share forecast to $2.38 to $2.53 from
$2.35 to $2.50 previously.
Earnings Call Information
Limited Brands will conduct its third quarter earnings call at
9 a.m. Eastern time on Thursday, Nov. 17. 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 2,628
specialty stores in the United
States and its brands are sold in more than 600
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 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 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 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 and 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
third 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.
Adjusted information which provides non-GAAP financial
information and estimates is presented in order to improve
investors' understanding of historical and expected results and
improve comparability of financial information from period to
period.
LIMITED
BRANDS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
THIRTEEN
WEEKS ENDED OCTOBER 29, 2011 AND OCTOBER 30, 2010
|
|
(Unaudited)
|
|
(In
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
Net Sales
|
$
2,173,420
|
|
$
1,983,372
|
|
Cost of Goods Sold, Buying and
Occupancy
|
(1,388,143)
|
|
(1,269,080)
|
|
Gross Profit
|
785,277
|
|
714,292
|
|
General, Administrative and
Store Operating Expenses
|
(599,175)
|
|
(565,194)
|
|
Operating Income
|
186,102
|
|
149,098
|
|
Interest Expense
|
(63,860)
|
|
(47,224)
|
|
Interest Income
|
319
|
|
461
|
|
Other Income
|
(687)
|
|
(832)
|
|
|
|
|
|
|
Income Before Income
Taxes
|
121,874
|
|
101,503
|
|
Provision for Income
Taxes
|
27,597
|
|
40,176
|
|
|
|
|
|
|
Net Income
|
$
94,277
|
|
$
61,327
|
|
|
|
|
|
|
Net Income Per Diluted
Share
|
$
0.31
|
|
$
0.18
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
307,928
|
|
331,981
|
|
|
|
|
|
LIMITED
BRANDS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
THIRTEEN
WEEKS ENDED OCTOBER 29, 2011 AND OCTOBER 30, 2010
|
|
(Unaudited)
|
|
(In
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Net Sales
|
$
2,173,420
|
|
$
-
|
|
$
2,173,420
|
|
$
1,983,372
|
|
Cost of Goods Sold,
|
|
|
|
|
|
|
|
|
|
Buying &
Occupancy
|
(1,388,143)
|
|
-
|
|
(1,388,143)
|
|
(1,269,080)
|
|
Gross Profit
|
785,277
|
|
-
|
|
785,277
|
|
714,292
|
|
General, Administrative
and
|
|
|
|
|
|
|
|
|
|
Store Operating
Expenses
|
(599,175)
|
|
-
|
|
(599,175)
|
|
(565,194)
|
|
Operating Income
|
186,102
|
|
-
|
|
186,102
|
|
149,098
|
|
Interest Expense
|
(63,860)
|
|
-
|
|
(63,860)
|
|
(47,224)
|
|
Interest Income
|
319
|
|
-
|
|
319
|
|
461
|
|
Other (Expense)
Income
|
(687)
|
|
-
|
|
(687)
|
|
(832)
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
121,874
|
|
-
|
|
121,874
|
|
101,503
|
|
Provision for Income
Taxes
|
27,597
|
|
16,691
|
|
44,288
|
|
40,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
94,277
|
|
$
(16,691)
|
|
$
77,586
|
|
$
61,327
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Diluted
Share
|
$
0.31
|
|
|
|
$
0.25
|
|
$
0.18
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
307,928
|
|
|
|
307,928
|
|
331,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to
Consolidated Statements of Income and Reconciliation of Adjusted
Results for additional information.
|
|
|
|
|
|
|
|
|
|
|
LIMITED
BRANDS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
THIRTY-NINE
WEEKS ENDED OCTOBER 29, 2011 AND OCTOBER 30, 2010
|
|
(Unaudited)
|
|
(In
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
Net Sales
|
$
6,848,572
|
|
$
6,157,417
|
|
Cost of Goods Sold, Buying and
Occupancy
|
(4,319,469)
|
|
(3,971,381)
|
|
Gross Profit
|
2,529,103
|
|
2,186,036
|
|
General, Administrative and
Store Operating Expenses
|
(1,932,645)
|
|
(1,615,504)
|
|
Operating Income
|
596,458
|
|
570,532
|
|
Interest Expense
|
(182,788)
|
|
(160,095)
|
|
Interest Income
|
1,101
|
|
1,707
|
|
Other Income
|
231,767
|
|
120,282
|
|
|
|
|
|
|
Income Before Income
Taxes
|
646,538
|
|
532,426
|
|
Provision for Income
Taxes
|
155,897
|
|
179,932
|
|
|
|
|
|
|
Net Income
|
$
490,641
|
|
$
352,494
|
|
|
|
|
|
|
Net Income Per Diluted
Share
|
$
1.55
|
|
$
1.06
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
317,067
|
|
332,874
|
|
|
|
|
|
LIMITED
BRANDS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
THIRTY-NINE
WEEKS ENDED OCTOBER 29, 2011 AND OCTOBER 30, 2010
|
|
(Unaudited)
|
|
(In
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Reported
|
|
Adjustments
|
|
Adjusted
|
|
Net Sales
|
$
6,848,572
|
|
$
-
|
|
$
6,848,572
|
|
$
6,157,417
|
|
$
-
|
|
$
6,157,417
|
|
Cost of Goods Sold,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buying &
Occupancy
|
(4,319,469)
|
|
-
|
|
(4,319,469)
|
|
(3,971,381)
|
|
-
|
|
(3,971,381)
|
|
Gross Profit
|
2,529,103
|
|
-
|
|
2,529,103
|
|
2,186,036
|
|
-
|
|
2,186,036
|
|
General, Administrative
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store Operating
Expenses
|
(1,932,645)
|
|
163,428
|
|
(1,769,217)
|
|
(1,615,504)
|
|
-
|
|
(1,615,504)
|
|
Operating Income
|
596,458
|
|
163,428
|
|
759,886
|
|
570,532
|
|
-
|
|
570,532
|
|
Interest Expense
|
(182,788)
|
|
-
|
|
(182,788)
|
|
(160,095)
|
|
-
|
|
(160,095)
|
|
Interest Income
|
1,101
|
|
-
|
|
1,101
|
|
1,707
|
|
-
|
|
1,707
|
|
Other (Expense)
Income
|
231,767
|
|
(233,478)
|
|
(1,711)
|
|
120,282
|
|
(95,383)
|
|
24,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
646,538
|
|
(70,050)
|
|
576,488
|
|
532,426
|
|
(95,383)
|
|
437,043
|
|
Provision for Income
Taxes
|
155,897
|
|
62,456
|
|
218,353
|
|
179,932
|
|
(7,689)
|
|
172,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
490,641
|
|
$
(132,506)
|
|
$
358,135
|
|
$
352,494
|
|
$
(87,694)
|
|
$
264,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Diluted
Share
|
$
1.55
|
|
|
|
$
1.13
|
|
$
1.06
|
|
|
|
$
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding
|
317,067
|
|
|
|
317,067
|
|
332,874
|
|
|
|
332,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 third quarter of 2011, adjusted results exclude the
following:
- A $16.7 million tax benefit
related to the favorable resolution of certain discrete income tax
matters.
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