Date of report (Date of earliest event reported): February 27, 2013 | ||
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: | March 1, 2013 | By: | /s/ STUART B. BURGDOERFER |
Stuart B. Burgdoerfer | |||
Executive Vice President and Chief Financial Officer |
• | A pre-tax, non-cash charge of $93.2 million, or $0.31 per share, related to intangible asset impairment at La Senza; and |
• | A pre-tax, non-cash charge of $26.9 million, or $0.06 per share, related to store fixed asset impairment at Henri Bendel. |
• | 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. |
• | 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: |
• | 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 | ||||||||
FOURTEEN WEEKS ENDED FEBRUARY 2, 2013 AND THIRTEEN WEEKS ENDED JANUARY 28, 2012 | ||||||||
(Unaudited) | ||||||||
(In thousands except per share amounts) | ||||||||
2012 | 2011 | |||||||
Net Sales | $ | 3,855,583 | $ | 3,515,426 | ||||
Cost of Goods Sold, Buying & Occupancy | (2,139,298 | ) | (1,987,769 | ) | ||||
Gross Profit | 1,716,285 | 1,527,657 | ||||||
General, Administrative and Store Operating Expenses | (835,327 | ) | (765,460 | ) | ||||
Impairment of Goodwill and Other Intangible Assets | (93,201 | ) | (231,862 | ) | ||||
Gain on Divestiture of Third-Party Sourcing Business | — | 110,801 | ||||||
Operating Income | 787,757 | 641,136 | ||||||
Interest Expense | (82,254 | ) | (63,487 | ) | ||||
Other Income | 4,907 | 2,289 | ||||||
Income Before Income Taxes | 710,410 | 579,938 | ||||||
Provision for Income Taxes | 299,014 | 220,497 | ||||||
Net Income | $ | 411,396 | $ | 359,441 | ||||
Net Income Per Diluted Share | $ | 1.39 | $ | 1.17 | ||||
Weighted Average Shares Outstanding | 295,423 | 306,042 |
LIMITED BRANDS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||
FOURTEEN WEEKS ENDED FEBRUARY 2, 2013 AND THIRTEEN WEEKS ENDED JANUARY 28, 2012 | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands except per share amounts) | ||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||
Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | |||||||||||||||||||
Net Sales | $ | 3,855,583 | $ | — | $ | 3,855,583 | $ | 3,515,426 | $ | — | $ | 3,515,426 | ||||||||||||
Cost of Goods Sold, Buying & Occupancy | (2,139,298 | ) | 26,881 | (2,112,417 | ) | (1,987,769 | ) | 16,985 | (1,970,784 | ) | ||||||||||||||
Gross Profit | 1,716,285 | 26,881 | 1,743,166 | 1,527,657 | 16,985 | 1,544,642 | ||||||||||||||||||
General, Administrative and Store Operating Expenses | (835,327 | ) | — | (835,327 | ) | (765,460 | ) | 7,357 | (758,103 | ) | ||||||||||||||
Impairment of Goodwill and Other Intangible Assets | (93,201 | ) | 93,201 | — | (231,862 | ) | 231,862 | — | ||||||||||||||||
Gain on Divestiture of Third-Party Sourcing Business | — | — | — | 110,801 | (110,801 | ) | — | |||||||||||||||||
Operating Income | 787,757 | 120,082 | 907,839 | 641,136 | 145,403 | 786,539 | ||||||||||||||||||
Interest Expense | (82,254 | ) | — | (82,254 | ) | (63,487 | ) | — | (63,487 | ) | ||||||||||||||
Other Income | 4,907 | — | 4,907 | 2,289 | — | 2,289 | ||||||||||||||||||
Income Before Income Taxes | 710,410 | 120,082 | 830,492 | 579,938 | 145,403 | 725,341 | ||||||||||||||||||
Provision for Income Taxes | 299,014 | 12,247 | 311,261 | 220,497 | 45,636 | 266,133 | ||||||||||||||||||
Net Income | $ | 411,396 | $ | 107,835 | $ | 519,231 | $ | 359,441 | $ | 99,767 | $ | 459,208 | ||||||||||||
Net Income Per Diluted Share | $ | 1.39 | $ | 1.76 | $ | 1.17 | $ | 1.50 | ||||||||||||||||
Weighted Average Shares Outstanding | 295,423 | 295,423 | 306,042 | 306,042 | ||||||||||||||||||||
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-THREE WEEKS ENDED FEBRUARY 2, 2013 AND FIFTY-TWO WEEKS ENDED JANUARY 28, 2012 | ||||||||
(Unaudited) | ||||||||
(In thousands except per share amounts) | ||||||||
2012 | 2011 | |||||||
Net Sales | $ | 10,458,651 | $ | 10,363,998 | ||||
Cost of Goods Sold, Buying & Occupancy | (6,072,804 | ) | (6,307,237 | ) | ||||
Gross Profit | 4,385,847 | 4,056,761 | ||||||
General, Administrative and Store Operating Expenses | (2,719,377 | ) | (2,698,107 | ) | ||||
Impairment of Goodwill and Other Intangible Assets | (93,201 | ) | (231,862 | ) | ||||
Gain on Divestiture of Third-Party Sourcing Business | — | 110,801 | ||||||
Operating Income | 1,573,269 | 1,237,593 | ||||||
Interest Expense | (316,727 | ) | (246,274 | ) | ||||
Other Income | 23,948 | 235,157 | ||||||
Income Before Income Taxes | 1,280,490 | 1,226,476 | ||||||
Provision for Income Taxes | 527,528 | 376,394 | ||||||
Net Income | $ | 752,962 | $ | 850,082 | ||||
Net Income Per Diluted Share | $ | 2.54 | $ | 2.70 | ||||
Weighted Average Shares Outstanding | 296,769 | 314,311 |
LIMITED BRANDS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||
FIFTY-THREE WEEKS ENDED FEBRUARY 2, 2013 AND FIFTY-TWO WEEKS ENDED JANUARY 28, 2012 | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands except per share amounts) | ||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||
Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | |||||||||||||||||||
Net Sales | $ | 10,458,651 | $ | — | $ | 10,458,651 | $ | 10,363,998 | $ | — | $ | 10,363,998 | ||||||||||||
Cost of Goods Sold, Buying & Occupancy | (6,072,804 | ) | 40,118 | (6,032,686 | ) | (6,307,237 | ) | 16,985 | (6,290,252 | ) | ||||||||||||||
Gross Profit | 4,385,847 | 40,118 | 4,425,965 | 4,056,761 | 16,985 | 4,073,746 | ||||||||||||||||||
General, Administrative and Store Operating Expenses | (2,719,377 | ) | 800 | (2,718,577 | ) | (2,698,107 | ) | 170,785 | (2,527,322 | ) | ||||||||||||||
Impairment of Goodwill and Other Intangible Assets | (93,201 | ) | 93,201 | — | (231,862 | ) | 231,862 | — | ||||||||||||||||
Gain on Divestiture of Third-Party Sourcing Business | — | — | — | 110,801 | (110,801 | ) | — | |||||||||||||||||
Operating Income | 1,573,269 | 134,119 | 1,707,388 | 1,237,593 | 308,831 | 1,546,424 | ||||||||||||||||||
Interest Expense | (316,727 | ) | — | (316,727 | ) | (246,274 | ) | — | (246,274 | ) | ||||||||||||||
Other Income | 23,948 | (12,745 | ) | 11,203 | 235,157 | (233,478 | ) | 1,679 | ||||||||||||||||
Income Before Income Taxes | 1,280,490 | 121,374 | 1,401,864 | 1,226,476 | 75,353 | 1,301,829 | ||||||||||||||||||
Provision for Income Taxes | 527,528 | 7,659 | 535,187 | 376,394 | 108,092 | 484,486 | ||||||||||||||||||
Net Income | $ | 752,962 | $ | 113,715 | $ | 866,677 | $ | 850,082 | $ | (32,739 | ) | $ | 817,343 | |||||||||||
Net Income Per Diluted Share | $ | 2.54 | $ | 2.92 | $ | 2.70 | $ | 2.60 | ||||||||||||||||
Weighted Average Shares Outstanding | 296,769 | 296,769 | 314,311 | 314,311 | ||||||||||||||||||||
See Notes to Consolidated Statements of Income and Reconciliation of Adjusted Results for additional information. |
• | A $93.2 million pre-tax charge ($91.2 million net of tax) related to the impairment of La Senza goodwill and other intangible assets. |
• | A $26.9 million pre-tax charge ($16.6 million net of tax), included in buying and occupancy expenses, related to the impairment of Henri Bendel store fixed assets. |
• | $10.4 million ($10.4 million net of tax) of store closure costs at La Senza. |
• | A $12.7 million pre-tax gain ($8.2 million net of tax), included in other income and expense, from $13.4 million of cash distributions related to the company's Easton investments. |
• | $3.6 million ($3.6 million net of tax) of store closure costs at La Senza. |
• | 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. |