Date of report (Date of earliest event reported): February 22, 2012 | ||
Limited Brands, Inc. | ||
(Exact Name of Registrant as Specified in Its Charter) | ||
Delaware | ||
(State or Other Jurisdiction of Incorporation) | ||
1-8344 | 31-1029810 | |
(Commission File Number) | (IRS Employer Identification No.) | |
Three Limited Parkway Columbus, OH | 43230 | |
(Address of Principal Executive Offices) | (Zip Code) | |
(614) 415-7000 | ||
(Registrant's Telephone Number, Including Area Code) | ||
Not Applicable | ||
(Former Name or Former Address, if Changed Since Last Report) |
Limited Brands, Inc. | |||
Date: | February 27, 2012 | By: | /s/ STUART B. BURGDOERFER |
Stuart B. Burgdoerfer | |||
Executive Vice President and Chief Financial Officer |
• | A pre-tax gain of $110.8 million, or $0.32 cents per share, related to the sale of our third party apparel sourcing business; |
• | A pre-tax, principally non-cash charge of $256.1 million, or $0.74 per share, related to intangible asset impairment and restructuring charges, including store closures, at La Senza; and |
• | A tax benefit of $28.4 million, or $0.09 cents per share, related to certain discrete tax matters. |
• | A pre-tax gain of $44.9 million, or $0.09 per share, related to the sale of Express stock; and |
• | A pre-tax gain of $7.1 million, or $0.01 per share, related to an Express dividend payment. |
• | 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. |
Limited Brands: | ||||
Investor Relations | Media Relations | |||
Amie Preston | Tammy Roberts Myers | |||
(614) 415-6704 | (614) 415-7072 | |||
apreston@limitedbrands.com | extcomm@limitedbrands.com |
LIMITED BRANDS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
THIRTEEN WEEKS ENDED JANUARY 28, 2012 AND JANUARY 29, 2011 | ||||||||
(Unaudited) | ||||||||
(In thousands except per share amounts) | ||||||||
2011 | 2010 | |||||||
Net Sales | $ | 3,515,426 | $ | 3,455,860 | ||||
Cost of Goods Sold, Buying & Occupancy | (1,987,769 | ) | (2,011,107 | ) | ||||
Gross Profit | 1,527,657 | 1,444,753 | ||||||
General, Administrative and Store Operating Expenses | (765,460 | ) | (731,251 | ) | ||||
Impairment of Goodwill and Other Intangible Assets | (231,862 | ) | — | |||||
Gain on Divestiture of Third-Party Sourcing Business | 110,801 | — | ||||||
Operating Income | 641,136 | 713,502 | ||||||
Interest Expense | (63,487 | ) | (48,299 | ) | ||||
Other (Expense) Income | 2,289 | 52,830 | ||||||
Income Before Income Taxes | 579,938 | 718,033 | ||||||
Provision for Income Taxes | 220,497 | 265,742 | ||||||
Net Income | $ | 359,441 | $ | 452,291 | ||||
Net Income Per Diluted Share | $ | 1.17 | $ | 1.36 | ||||
Weighted Average Shares Outstanding | 306,042 | 332,875 |
LIMITED BRANDS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||
THIRTEEN WEEKS ENDED JANUARY 28, 2012 AND JANUARY 29, 2011 | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands except per share amounts) | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | |||||||||||||||||||
Net Sales | $ | 3,515,426 | $ | — | $ | 3,515,426 | $ | 3,455,860 | $ | — | $ | 3,455,860 | ||||||||||||
Cost of Goods Sold, Buying & Occupancy | (1,987,769 | ) | 16,985 | (1,970,784 | ) | (2,011,107 | ) | — | (2,011,107 | ) | ||||||||||||||
Gross Profit | 1,527,657 | 16,985 | 1,544,642 | 1,444,753 | — | 1,444,753 | ||||||||||||||||||
General, Administrative and Store Operating Expenses | (765,460 | ) | 7,357 | (758,103 | ) | (731,251 | ) | — | (731,251 | ) | ||||||||||||||
Impairment of Goodwill and Other Intangible Assets | (231,862 | ) | 231,862 | — | — | — | — | |||||||||||||||||
Gain on Divestiture of Third-Party Sourcing Business | 110,801 | (110,801 | ) | — | — | — | — | |||||||||||||||||
Operating Income | 641,136 | 145,403 | 786,539 | 713,502 | — | 713,502 | ||||||||||||||||||
Interest Expense | (63,487 | ) | — | (63,487 | ) | (48,299 | ) | — | (48,299 | ) | ||||||||||||||
Other (Expense) Income | 2,289 | — | 2,289 | 52,830 | (52,011 | ) | 819 | |||||||||||||||||
Income Before Income Taxes | 579,938 | 145,403 | 725,341 | 718,033 | (52,011 | ) | 666,022 | |||||||||||||||||
Provision for Income Taxes | 220,497 | 45,636 | 266,133 | 265,742 | (19,400 | ) | 246,342 | |||||||||||||||||
Net Income | $ | 359,441 | $ | 99,767 | $ | 459,208 | $ | 452,291 | $ | (32,611 | ) | $ | 419,680 | |||||||||||
Net Income Per Diluted Share | $ | 1.17 | $ | 1.50 | $ | 1.36 | $ | 1.26 | ||||||||||||||||
Weighted Average Shares Outstanding | 306,042 | 306,042 | 332,875 | 332,875 | ||||||||||||||||||||
See Notes to Consolidated Statements of Income and Reconciliation of Adjusted Results for additional information. |
LIMITED BRANDS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
FIFTY-TWO WEEKS ENDED JANUARY 28, 2012 AND JANUARY 29, 2011 | ||||||||
(Unaudited) | ||||||||
(In thousands except per share amounts) | ||||||||
2011 | 2010 | |||||||
Net Sales | $ | 10,363,998 | $ | 9,613,277 | ||||
Cost of Goods Sold, Buying & Occupancy | (6,307,237 | ) | (5,982,489 | ) | ||||
Gross Profit | 4,056,761 | 3,630,788 | ||||||
General, Administrative and Store Operating Expenses | (2,698,107 | ) | (2,346,754 | ) | ||||
Impairment of Goodwill and Other Intangible Assets | (231,862 | ) | — | |||||
Gain on Divestiture of Third-Party Sourcing Business | 110,801 | — | ||||||
Operating Income | 1,237,593 | 1,284,034 | ||||||
Interest Expense | (246,274 | ) | (208,394 | ) | ||||
Other (Expense) Income | 235,157 | 174,820 | ||||||
Income Before Income Taxes | 1,226,476 | 1,250,460 | ||||||
Provision for Income Taxes | 376,394 | 445,674 | ||||||
Net Income | $ | 850,082 | $ | 804,786 | ||||
Net Income Per Diluted Share | $ | 2.70 | $ | 2.42 | ||||
Weighted Average Shares Outstanding | 314,311 | 332,874 |
LIMITED BRANDS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||
FIFTY-TWO WEEKS ENDED JANUARY 28, 2012 AND JANUARY 29, 2011 | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands except per share amounts) | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | |||||||||||||||||||
Net Sales | $ | 10,363,998 | $ | — | $ | 10,363,998 | $ | 9,613,277 | $ | — | $ | 9,613,277 | ||||||||||||
Cost of Goods Sold, Buying & Occupancy | (6,307,237 | ) | 16,985 | (6,290,252 | ) | (5,982,489 | ) | — | (5,982,489 | ) | ||||||||||||||
Gross Profit | 4,056,761 | 16,985 | 4,073,746 | 3,630,788 | — | 3,630,788 | ||||||||||||||||||
General, Administrative and Store Operating Expenses | (2,698,107 | ) | 170,785 | (2,527,322 | ) | (2,346,754 | ) | — | (2,346,754 | ) | ||||||||||||||
Impairment of Goodwill and Other Intangible Assets | (231,862 | ) | 231,862 | — | — | — | — | |||||||||||||||||
Gain on Divestiture of Third-Party Sourcing Business | 110,801 | (110,801 | ) | — | — | — | — | |||||||||||||||||
Operating Income | 1,237,593 | 308,831 | 1,546,424 | 1,284,034 | — | 1,284,034 | ||||||||||||||||||
Interest Expense | (246,274 | ) | — | (246,274 | ) | (208,394 | ) | — | (208,394 | ) | ||||||||||||||
Other (Expense) Income | 235,157 | (233,478 | ) | 1,679 | 174,820 | (147,394 | ) | 27,426 | ||||||||||||||||
Income Before Income Taxes | 1,226,476 | 75,353 | 1,301,829 | 1,250,460 | (147,394 | ) | 1,103,066 | |||||||||||||||||
Provision for Income Taxes | 376,394 | 108,092 | 484,486 | 445,674 | (27,088 | ) | 418,586 | |||||||||||||||||
Net Income | $ | 850,082 | $ | (32,739 | ) | $ | 817,343 | $ | 804,786 | $ | (120,306 | ) | $ | 684,480 | ||||||||||
Net Income Per Diluted Share | $ | 2.70 | $ | 2.60 | $ | 2.42 | $ | 2.06 | ||||||||||||||||
Weighted Average Shares Outstanding | 314,311 | 314,311 | 332,874 | 332,874 | ||||||||||||||||||||
See Notes to Consolidated Statements of Income and Reconciliation of Adjusted Results for additional information. |
• | A $231.8 million pre-tax charge ($203.0 million net of tax), related to the impairment of La Senza goodwill and other intangible assets. |
• | A $110.8 million pre-tax gain ($99.3 million net of tax), related to the sale of 51% of our third-party sourcing business to Sycamore Partners. |
• | $24.3 million ($24.3 million net of tax) of restructuring expenses at La Senza. |
• | A $28.4 million tax benefit related to certain discrete income tax matters. |
• | A $16.7 million tax benefit related to the favorable resolution of certain discrete income tax matters. |
• | 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. |
• | 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. |
• | A $44.9 million pre-tax gain ($28.2M net of tax), included in other income and expense, related to the sale of Express stock. |
• | A $7.1 million pre-tax gain ($4.4M net of tax), included in other income and expense, related to a dividend payment from Express. |
• | 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. |
• | 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. |