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L Brands Reports Second Quarter 2014 Earnings

-- PROVIDES THIRD QUARTER AND RAISES FULL-YEAR 2014 EARNINGS GUIDANCE --

COLUMBUS, Ohio, Aug. 20, 2014 /PRNewswire/ -- L Brands, Inc. (NYSE: LB) today reported 2014 second quarter results.

Second Quarter Results

Earnings per share for the second quarter ended Aug. 2, 2014, were $0.63 compared to $0.61 for the quarter ended Aug. 3, 2013.  Second quarter operating income increased 5 percent to $375.9 million compared to $357.8 million last year, and net income was $188.4 million compared to $178.9 million last year. 

The company reported net sales of $2.675 billion for the 13 weeks ended Aug. 2, 2014, an increase of 6 percent compared to sales of $2.516 billion for the 13 weeks ended Aug. 3, 2013.  The company reported a comparable store sales increase of 3 percent for the 13 weeks ended Aug. 2, 2014.

2014 Outlook

The company stated that it expects 2014 third quarter earnings per share to be $0.26 to $0.31, and raised its full-year earnings forecast to $3.03 to $3.18 per share from $3.00 to $3.15 previously, which includes the previously announced estimated full-year negative impact of about $0.10 to $0.12 ($0.03 to $0.04 in the third quarter) related to the exit of certain non-core categories in the Victoria's Secret direct and beauty businesses to allow the brand to focus on faster growing, more profitable product lines.

Earnings Call Information

L Brands will conduct its second quarter earnings call at 9 a.m. Eastern on Aug. 21.  To listen, call 1-866-583-6618 (international dial-in number: 1-937-200-3978).  For an audio replay, call 1-866-639-7583 (international replay number: 1-706-902-3452) or log onto www.LB.com.  Additional second quarter 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 2,942 company-owned specialty stores in the United States, Canada and the United Kingdom, and its brands are sold in about 600 additional franchised 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 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 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 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 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;
    • 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 second 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 2013 Annual Report on Form 10-K.


L BRANDS
SECOND QUARTER 2014


Comparable Store Sales Increase (Decrease):




Second

Quarter

2014


Second

Quarter

2013


Year-

to-

Date

2014


Year-

to-

Date

2013










Victoria's Secret1


3%


1%


3%


2%

Bath & Body Works1


3%


3%


3%


3%

L Brands


3%


2%


3%


2%

Victoria's Secret

Direct Sales


 

0%


 

(6%)


 

0%


 

(6%)

1 – Results include company-owned stores in the United States and Canada.

Total Sales (Millions):



 

Second

Quarter

 2014


Second

Quarter

 2013


Year-

to-

Date

 2014


Year-

to-

Date

 2013









Victoria's Secret Stores1

$ 1,363.0


$ 1,281.6


$ 2,608.4


$ 2,466.3

Victoria's Secret Direct

382.4


383.7


740.6


742.7

  Total Victoria's Secret

$ 1,745.4


$ 1,665.3


$ 3,349.0


$ 3,209.0

Bath & Body Works1

$ 638.3


$ 611.3


$ 1,168.5


$ 1,128.5

Bath & Body Works Direct

66.4


56.6


117.8


100.3

  Total Bath & Body Works

$ 704.7


$ 667.9


$ 1,286.3


$ 1,228.8

VS & BBW International2

$  79.3


$  46.3


$  150.3


$  86.7

Other

$ 145.9


$ 136.5


$ 280.9


$ 259.4

L Brands

$ 2,675.3


$ 2,516.0


$ 5,066.5


$ 4,783.9

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, royalties associated with franchised stores and wholesale sales.

Total Company-Owned Stores:




Stores


Stores



Operating


Operating



at 2/1/14

Opened

  Closed

at 8/2/14







Victoria's Secret U.S.


977

3

(2)

978

PINK U.S.


83

15

(1)

97

Victoria's Secret Canada


24

4

-

28

PINK Canada


10

-

-

10

   Total Victoria's Secret


1,094

22

(3)

1,113







Bath & Body Works U.S.


1,559

4

(8)

1,555

Bath & Body Works Canada 


79

7

(1)

85

   Total Bath & Body Works


1,638

11

(9)

1,640







Victoria's Secret U.K.


5

2

-

7

Henri Bendel


29

-

-

29

La Senza Canada


157

-

(4)

153

Total L Brands Stores


2,923

35

(16)

2,942

 

Total Franchise Stores:



Stores


Stores


Operating


Operating


at 2/1/14

Opened

Closed

at 8/2/14






Victoria's Secret Beauty & Accessories

198

34

(2)

230

VS International (Full Assortment)

4

4

-

8

BBW International

55

11

-

66

La Senza International

331

2

(26)

307

Total Franchise Stores

588

51

(28)

611

 

 

L BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME 

THIRTEEN WEEKS ENDED AUGUST 2, 2014 AND AUGUST 3, 2013

(Unaudited)

(In thousands except per share amounts) 






2014


2013

Net Sales

$  2,675,311


$  2,515,953

Cost of Goods Sold, Buying and Occupancy

(1,630,951)


(1,527,328)

Gross Profit

1,044,360


988,625

General, Administrative and Store Operating Expenses

(668,418)


(630,819)

Operating Income

375,942


357,806

Interest Expense

(81,631)


(75,968)

Other Income

1,962


1,016





Income Before Income Taxes

296,273


282,854

Provision for Income Taxes

107,916


103,940





Net Income 

$     188,357


$     178,914





Net Income Per Diluted Share

$           0.63


$           0.61





Weighted Average Shares Outstanding

297,342


295,473

 

 

 

L BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME 

TWENTY-SIX WEEKS ENDED AUGUST 2, 2014 AND AUGUST 3, 2013

(Unaudited)

(In thousands except per share amounts) 






2014


2013

Net Sales

$  5,066,541


$  4,783,910

Cost of Goods Sold, Buying and Occupancy

(3,040,089)


(2,853,873)

Gross Profit

2,026,452


1,930,037

General, Administrative and Store Operating Expenses

(1,314,399)


(1,261,050)

Operating Income

712,053


668,987

Interest Expense

(165,954)


(155,341)

Other Income

5,615


4,005





Income Before Income Taxes

551,714


517,651

Provision for Income Taxes

206,375


196,234





Net Income 

$     345,339


$     321,417





Net Income Per Diluted Share

$           1.16


$           1.09





Weighted Average Shares Outstanding

297,333


295,329

 

 

 

L Brands, Inc. logo.

 

Logo - http://photos.prnewswire.com/prnh/20140130/CL56250LOGO

SOURCE L Brands, Inc.

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