Date of report (Date of earliest event reported): May 18, 2016 | ||
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: | May 20, 2016 | By: | /s/ STUART B. BURGDOERFER |
Stuart B. Burgdoerfer | |||
Executive Vice President and Chief Financial Officer |
• | In 2016: |
• | Pre-tax charges of $34.5 million ($0.07 per share) related to previously announced actions at Victoria’s Secret, including severance charges, fabric cancellations and the write-off of catalogue paper |
• | In 2015: |
• | A pre-tax gain of $78.1 million ($0.23 per share) on the sale of the company’s remaining interest in the third-party apparel sourcing business |
• | 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 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 internationally and related risks; |
• | our relationships with independent franchise, license and wholesale partners; |
• | our direct channel businesses; |
• | our ability to protect our reputation and our brand images; |
• | our ability to attract customers with marketing, advertising and promotional programs; |
• | our ability to protect our trade names, trademarks and patents; |
• | the highly competitive nature of the retail industry and the segments in which we operate; |
• | 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, significant health hazards, environmental hazards or natural disasters; |
• | 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; |
• | our geographic concentration of supplier and distribution facilities in central Ohio; |
• | fluctuations in foreign currency exchange rates; |
• | stock price volatility; |
• | our ability to pay dividends and related effects; |
• | our ability 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 ability of our manufacturers to deliver products in a timely manner, meet quality standards and comply with applicable laws and regulations; |
• | 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 ability to maintain the security of customer, associate, supplier or company information; |
• | our ability to comply with regulatory requirements; |
• | legal and compliance matters; and |
• | tax matters. |
L Brands: | ||||
Investor Relations | Media Relations | |||
Amie Preston | Tammy Roberts Myers | |||
(614) 415-6704 | (614) 415-7072 | |||
apreston@lb.com | communications@lb.com |
First Quarter | |||||
Total company comps | |||||
(including direct sales) | |||||
2016 | 2015 | ||||
Victoria's Secret1 | 2 | % | 3 | % | |
Bath & Body Works1 | 6 | % | 5 | % | |
L Brands2 | 3 | % | 3 | % |
First Quarter | |||||
Store only comps | |||||
2016 | 2015 | ||||
Victoria's Secret1 | 1 | % | 5 | % | |
Bath & Body Works1 | 4 | % | 4 | % | |
L Brands2 | 2 | % | 5 | % |
First Quarter | First Quarter | ||||||
2016 | 2015 | ||||||
Victoria's Secret Stores1 | $ | 1,381.2 | $ | 1,345.6 | |||
Victoria's Secret Direct | 359.7 | 338.3 | |||||
Total Victoria's Secret | $ | 1,740.9 | $ | 1,683.9 | |||
Bath & Body Works Stores1 | $ | 586.7 | $ | 554.0 | |||
Bath & Body Works Direct | 73.5 | 59.3 | |||||
Total Bath & Body Works | $ | 660.2 | $ | 613.3 | |||
VS & BBW International2 | $ | 95.2 | $ | 91.5 | |||
Other | $ | 117.5 | $ | 123.2 | |||
L Brands | $ | 2,613.8 | $ | 2,511.9 |
Stores | Stores | |||||||||
Operating | Operating | |||||||||
at 1/30/16 | Opened | Acquired | Closed | at 4/30/16 | ||||||
Victoria's Secret U.S. | 990 | 4 | — | (2 | ) | 992 | ||||
PINK U.S. | 128 | 1 | — | — | 129 | |||||
Victoria's Secret Canada | 37 | — | — | — | 37 | |||||
PINK Canada | 9 | — | — | — | 9 | |||||
Total Victoria's Secret | 1,164 | 5 | — | (2 | ) | 1,167 | ||||
Bath & Body Works U.S. | 1,574 | 3 | — | (1 | ) | 1,576 | ||||
Bath & Body Works Canada | 98 | 1 | — | — | 99 | |||||
Total Bath & Body Works | 1,672 | 4 | (1 | ) | 1,675 | |||||
Victoria's Secret U.K. | 12 | — | — | — | 12 | |||||
PINK U.K. | 2 | 1 | — | — | 3 | |||||
Victoria's Secret Beauty and Accessories | — | 1 | 26 | — | 27 | |||||
Henri Bendel | 29 | — | — | — | 29 | |||||
La Senza Canada | 126 | — | — | (1 | ) | 125 | ||||
Total L Brands Stores | 3,005 | 11 | 26 | (4 | ) | 3,038 |
Stores | Stores | |||||||||
Operating | Operating | |||||||||
at 1/30/16 | Opened | Closed | Transferred | at 4/30/16 | ||||||
Victoria's Secret Beauty & Accessories | 373 | 14 | (5 | ) | (26 | ) | 356 | |||
Victoria's Secret | 16 | 1 | — | — | 17 | |||||
PINK | 3 | — | — | — | 3 | |||||
Bath & Body Works | 125 | 7 | (1 | ) | — | 131 | ||||
La Senza | 221 | — | (4 | ) | — | 217 | ||||
Total | 738 | 22 | (10 | ) | (26 | ) | 724 |
L BRANDS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
THIRTEEN WEEKS ENDED APRIL 30, 2016 AND MAY 2, 2015 | ||||||||
(Unaudited) | ||||||||
(In thousands except per share amounts) | ||||||||
2016 | 2015 | |||||||
Net Sales | $ | 2,613,815 | $ | 2,511,939 | ||||
Costs of Goods Sold, Buying and Occupancy | (1,570,861 | ) | (1,455,980 | ) | ||||
Gross Profit | 1,042,954 | 1,055,959 | ||||||
General, Administrative and Store Operating Expenses | (719,566 | ) | (684,116 | ) | ||||
Operating Income | 323,388 | 371,843 | ||||||
Interest Expense | (97,328 | ) | (79,948 | ) | ||||
Other Income | 6,918 | 77,694 | ||||||
Income Before Income Taxes | 232,978 | 369,589 | ||||||
Provision for Income Taxes | 80,672 | 119,123 | ||||||
Net Income | $ | 152,306 | $ | 250,466 | ||||
Net Income Per Diluted Share | $ | 0.52 | $ | 0.84 | ||||
Weighted Average Shares Outstanding | 292,778 | 299,143 |
L BRANDS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||
THIRTEEN WEEKS ENDED APRIL 30, 2016 AND MAY 2, 2015 | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In thousands except per share amounts) | ||||||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||||
Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | |||||||||||||||||||
Net Sales | $ | 2,613,815 | $ | — | $ | 2,613,815 | $ | 2,511,939 | $ | — | $ | 2,511,939 | ||||||||||||
Costs of Goods Sold, Buying and Occupancy | (1,570,861 | ) | 11,103 | (1,559,758 | ) | (1,455,980 | ) | — | (1,455,980 | ) | ||||||||||||||
Gross Profit | 1,042,954 | 11,103 | 1,054,057 | 1,055,959 | — | 1,055,959 | ||||||||||||||||||
General, Administrative and Store Operating Expenses | (719,566 | ) | 23,442 | (696,124 | ) | (684,116 | ) | — | (684,116 | ) | ||||||||||||||
Operating Income | 323,388 | 34,545 | 357,933 | 371,843 | — | 371,843 | ||||||||||||||||||
Interest Expense | (97,328 | ) | — | (97,328 | ) | (79,948 | ) | — | (79,948 | ) | ||||||||||||||
Other Income | 6,918 | — | 6,918 | 77,694 | (78,057 | ) | (363 | ) | ||||||||||||||||
Income Before Income Taxes | 232,978 | 34,545 | 267,523 | 369,589 | (78,057 | ) | 291,532 | |||||||||||||||||
Provision for Income Taxes | 80,672 | 13,175 | 93,847 | 119,123 | (9,079 | ) | 110,044 | |||||||||||||||||
Net Income | $ | 152,306 | $ | 21,370 | $ | 173,676 | $ | 250,466 | $ | (68,978 | ) | $ | 181,488 | |||||||||||
Net Income Per Diluted Share | $ | 0.52 | $ | 0.59 | $ | 0.84 | $ | 0.61 | ||||||||||||||||
Weighted Average Shares Outstanding | 292,778 | 292,778 | 299,143 | 299,143 |
• | Pre-tax charges of $34.5 million ($21.4 million net of tax) related to previously announced actions at Victoria’s Secret, including severance charges, fabric cancellations and the write-off of catalogue paper. |
• | A $78.1 million pre-tax gain ($69.0 million net of tax) included in other income, related to the sale of our remaining interest in the third-party apparel sourcing business. |
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