Date of report (Date of earliest event reported): February 26, 2014 | ||
L 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) |
L Brands, Inc. | |||
Date: | February 28, 2014 | 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. |
• | 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 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; |
• | the disruption of production or distribution 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 or refinance 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 and to protect associated data; |
• | our failure to comply with regulatory requirements; |
• | tax matters; and |
• | legal and compliance matters. |
Investor Relations | Media Relations | |||
Amie Preston | Tammy Roberts Myers | |||
(614) 415-6704 | (614) 415-7072 | |||
apreston@lb.com | extcomm@lb.com |
L BRANDS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
THIRTEEN WEEKS ENDED FEBRUARY 1, 2014 AND FOURTEEN WEEKS ENDED FEBRUARY 2, 2013 | ||||||||
(Unaudited) | ||||||||
(In thousands except per share amounts) | ||||||||
2013 | 2012 | |||||||
Net Sales | $ | 3,818,202 | $ | 3,855,583 | ||||
Cost of Goods Sold, Buying & Occupancy | (2,175,897 | ) | (2,139,298 | ) | ||||
Gross Profit | 1,642,305 | 1,716,285 | ||||||
General, Administrative and Store Operating Expenses | (778,844 | ) | (835,327 | ) | ||||
Impairment of Goodwill and Other Intangible Assets | — | (93,201 | ) | |||||
Operating Income | 863,461 | 787,757 | ||||||
Interest Expense | (82,220 | ) | (82,254 | ) | ||||
Other Income | 5,550 | 4,907 | ||||||
Income Before Income Taxes | 786,791 | 710,410 | ||||||
Provision for Income Taxes | 297,171 | 299,014 | ||||||
Net Income | $ | 489,620 | $ | 411,396 | ||||
Net Income Per Diluted Share | $ | 1.65 | $ | 1.39 | ||||
Weighted Average Shares Outstanding | 297,018 | 295,423 |
L BRANDS, INC. AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
THIRTEEN WEEKS ENDED FEBRUARY 1, 2014 AND FOURTEEN WEEKS ENDED FEBRUARY 2, 2013 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands except per share amounts) | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Reported | Reported | Adjustments | Adjusted | |||||||||||||
Net Sales | $ | 3,818,202 | $ | 3,855,583 | $ | — | $ | 3,855,583 | ||||||||
Cost of Goods Sold, Buying & Occupancy | (2,175,897 | ) | (2,139,298 | ) | 26,881 | (2,112,417 | ) | |||||||||
Gross Profit | 1,642,305 | 1,716,285 | 26,881 | 1,743,166 | ||||||||||||
General, Administrative and Store Operating Expenses | (778,844 | ) | (835,327 | ) | — | (835,327 | ) | |||||||||
Impairment of Goodwill and Other Intangible Assets | — | (93,201 | ) | 93,201 | — | |||||||||||
Operating Income | 863,461 | 787,757 | 120,082 | 907,839 | ||||||||||||
Interest Expense | (82,220 | ) | (82,254 | ) | — | (82,254 | ) | |||||||||
Other Income | 5,550 | 4,907 | — | 4,907 | ||||||||||||
Income Before Income Taxes | 786,791 | 710,410 | 120,082 | 830,492 | ||||||||||||
Provision for Income Taxes | 297,171 | 299,014 | 12,247 | 311,261 | ||||||||||||
Net Income | $ | 489,620 | $ | 411,396 | $ | 107,835 | $ | 519,231 | ||||||||
Net Income Per Diluted Share | $ | 1.65 | $ | 1.39 | $ | 1.76 | ||||||||||
Weighted Average Shares Outstanding | 297,018 | 295,423 | 295,423 | |||||||||||||
See Notes to Consolidated Statements of Income and Reconciliation of Adjusted Results for additional information. |
L BRANDS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
FIFTY-TWO WEEKS ENDED FEBRUARY 1, 2014 AND FIFTY-THREE WEEKS ENDED FEBRUARY 2, 2013 | ||||||||
(Unaudited) | ||||||||
(In thousands except per share amounts) | ||||||||
2013 | 2012 | |||||||
Net Sales | $ | 10,773,199 | $ | 10,458,651 | ||||
Cost of Goods Sold, Buying & Occupancy | (6,344,149 | ) | (6,072,804 | ) | ||||
Gross Profit | 4,429,050 | 4,385,847 | ||||||
General, Administrative and Store Operating Expenses | (2,685,576 | ) | (2,719,377 | ) | ||||
Impairment of Goodwill and Other Intangible Assets | — | (93,201 | ) | |||||
Operating Income | 1,743,474 | 1,573,269 | ||||||
Interest Expense | (314,402 | ) | (316,727 | ) | ||||
Other Income | 16,793 | 23,948 | ||||||
Income Before Income Taxes | 1,445,865 | 1,280,490 | ||||||
Provision for Income Taxes | 542,844 | 527,528 | ||||||
Net Income | $ | 903,021 | $ | 752,962 | ||||
Net Income Per Diluted Share | $ | 3.05 | $ | 2.54 | ||||
Weighted Average Shares Outstanding | 296,055 | 296,769 |
L BRANDS, INC. AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
FIFTY-TWO WEEKS ENDED FEBRUARY 1, 2014 AND FIFTY-THREE WEEKS ENDED FEBRUARY 2, 2013 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands except per share amounts) | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Reported | Reported | Adjustments | Adjusted | |||||||||||||
Net Sales | $ | 10,773,199 | $ | 10,458,651 | $ | — | $ | 10,458,651 | ||||||||
Cost of Goods Sold, Buying & Occupancy | (6,344,149 | ) | (6,072,804 | ) | 40,118 | (6,032,686 | ) | |||||||||
Gross Profit | 4,429,050 | 4,385,847 | 40,118 | 4,425,965 | ||||||||||||
General, Administrative and Store Operating Expenses | (2,685,576 | ) | (2,719,377 | ) | 800 | (2,718,577 | ) | |||||||||
Impairment of Goodwill and Other Intangible Assets | — | (93,201 | ) | 93,201 | — | |||||||||||
Operating Income | 1,743,474 | 1,573,269 | 134,119 | 1,707,388 | ||||||||||||
Interest Expense | (314,402 | ) | (316,727 | ) | — | (316,727 | ) | |||||||||
Other Income | 16,793 | 23,948 | (12,745 | ) | 11,203 | |||||||||||
Income Before Income Taxes | 1,445,865 | 1,280,490 | 121,374 | 1,401,864 | ||||||||||||
Provision for Income Taxes | 542,844 | 527,528 | 7,659 | 535,187 | ||||||||||||
Net Income | $ | 903,021 | $ | 752,962 | $ | 113,715 | $ | 866,677 | ||||||||
Net Income Per Diluted Share | $ | 3.05 | $ | 2.54 | $ | 2.92 | ||||||||||
Weighted Average Shares Outstanding | 296,055 | 296,769 | 296,769 | |||||||||||||
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, 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. |
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