L BRANDS COLUMBUS, Ohio, Nov. 19, 2014 /PRNewswire/ -- L Brands, Inc. (NYSE: LB) today reported 2014 third quarter results.
Third Quarter Results
Earnings per share for the third quarter ended Nov. 1, 2014, increased 42 percent to a record $0.44 compared to $0.31 for the quarter ended Nov. 2, 2013. Third quarter operating income increased 35 percent to $284.1 million compared to $211.0 million last year, and net income was $131.8 million compared to $92.0 million last year.
The company reported net sales of $2.319 billion for the third quarter ended Nov. 1, 2014, an increase of 7 percent compared to sales of $2.171 billion for the quarter ended Nov. 2, 2013. The company reported a comparable store sales increase of 5 percent for the quarter ended Nov. 1, 2014.
2014 Outlook
The company stated that it expects 2014 fourth quarter earnings per share to be $1.61 to $1.71, which is consistent with its previous guidance. The company raised its full-year earnings forecast to $3.21 to $3.31 per share from $3.03 to $3.18 previously, which includes the previously announced estimated full-year negative impact of about $0.10 to $0.12 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 third quarter earnings call at 9 a.m. Eastern on Nov. 20. 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 third 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 2,971 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 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 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 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 2013 Annual Report on Form 10-K.
L BRANDS
THIRD QUARTER 2014
Comparable Store Sales Increase (Decrease):
Third Third Year-to- Year-to-
Quarter Quarter
2014 2013 Date Date
2014 2013
---- ----
Victoria's Secret(1) 3% 4% 3% 2%
Bath & Body Works(1) 7% 2% 4% 3%
L Brands 5% 3% 3% 3%
Victoria's Secret
Direct Sales 2% (1%) 0% (4%)
(1) - Results include company-owned stores in the United States and Canada.
Total Sales (Millions):
Third Third Year-to- Year-to-
Quarter Quarter Date Date
2014 2013 2014 2013
---- ---- ---- ----
Victoria's Secret
Stores(1) $1,177.6 $1,104.1 $3,785.9 $3,570.4
Victoria's Secret
Direct 274.7 268.9 1,015.4 1,011.6
Total Victoria's
Secret $1,452.3 $1,373.0 $4,801.3 $4,582.0
Bath & Body
Works(1) $602.7 $558.0 $1,771.1 $1,686.5
Bath & Body Works
Direct 56.7 48.7 174.5 149.0
Total Bath & Body
Works $659.4 $606.7 $1,945.6 $1,835.5
VS & BBW
International(2) $80.0 $59.8 $230.4 $146.5
Other $127.2 $131.6 $408.1 $391.0
L Brands $2,318.9 $2,171.1 $7,385.4 $6,955.0
======== ======== ======== ========
(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 11/1/14
--------- ------ ------ ----------
Victoria's
Secret
U.S. 977 9 (4) 982
PINK U.S. 83 32 (1) 114
Victoria's
Secret
Canada 24 6 - 30
PINK
Canada 10 - - 10
Total
Victoria's
Secret 1,094 47 (5) 1,136
Bath &
Body
Works
U.S. 1,559 13 (11) 1,561
Bath &
Body
Works
Canada 79 10 (1) 88
Total
Bath &
Body
Works 1,638 23 (12) 1,649
Victoria's
Secret
U.K. 5 4 - 9
Henri
Bendel 29 - - 29
La Senza
Canada 157 - (9) 148
Total L
Brands
Stores 2,923 74 (26) 2,971
===== === === =====
Total Franchise Stores:
Stores Stores
Operating Operating
at 2/1/14 Opened Closed at 11/1/14
--------- ------ ------ ----------
Victoria's Secret
Beauty &
Accessories 198 54 (7) 245
VS International
(Full
Assortment) 4 4 - 8
BBW International 55 13 (1) 67
La Senza
International 331 3 (66) 268
--- --- --- ---
Total Franchise
Stores 588 74 (74) 588
=== === === ===
L BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THIRTEEN WEEKS ENDED NOVEMBER 1, 2014 AND NOVEMBER 2, 2013
(Unaudited)
(In thousands except per share amounts)
2014 2013
---- ----
Net Sales $2,318,851 $2,171,087
Costs of
Goods
Sold,
Buying
and
Occupancy (1,372,424) (1,314,378)
---------- ----------
Gross
Profit 946,427 856,709
General,
Administrative
and Store
Operating
Expenses (662,314) (645,683)
Operating
Income 284,113 211,026
Interest
Expense (80,344) (76,840)
Other
Income 701 7,238
Income
Before
Income
Taxes 204,470 141,424
Provision
for
Income
Taxes 72,662 49,440
------ ------
Net Income $131,808 $91,984
======== =======
Net Income
Per
Diluted
Share $0.44 $0.31
===== =====
Weighted
Average
Shares
Outstanding 298,134 296,544
======= =======
L BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THIRTY-NINE WEEKS ENDED NOVEMBER 1, 2014 AND NOVEMBER 2, 2013
(Unaudited)
(In thousands except per share amounts)
2014 2013
---- ----
Net Sales $7,385,392 $6,954,997
Costs of Goods Sold, Buying
and Occupancy (4,412,513) (4,168,252)
---------- ----------
Gross Profit 2,972,879 2,786,745
General, Administrative and
Store Operating Expenses (1,976,712) (1,906,733)
Operating Income 996,167 880,012
Interest Expense (246,297) (232,181)
Other Income 6,314 11,243
Income Before Income Taxes 756,184 659,074
Provision for Income Taxes 279,037 245,674
------- -------
Net Income $477,147 $413,400
======== ========
Net Income Per Diluted Share $1.60 $1.40
===== =====
Weighted Average Shares
Outstanding 297,600 295,734
======= =======
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SOURCE L Brands, Inc.
