L Brands Reports First Quarter Earnings
May 23 2018 - 4:15PM
L Brands, Inc. (NYSE:LB) today reported first quarter earnings
results.
Earnings per share for the first quarter ended
May 5, 2018, were $0.17 compared to $0.33 for the quarter ended
April 29, 2017. First quarter operating income was $154.8
million compared to $209.2 million last year, and net income was
$47.5 million compared to $94.1 million last year.
The company reported net sales of $2.626 billion
for the first quarter ended May 5, 2018, an increase of 8 percent
compared to sales of $2.437 billion for the quarter ended April 29,
2017. Comparable sales for the first quarter ended May 5,
2018, increased 3 percent compared to the thirteen weeks ended May
6, 2017.
2018 OutlookThe company
decreased its guidance for 2018 full-year earnings per share to
$2.70 to $3.00 from $2.95 to $3.25 previously, and issued guidance
for second quarter earnings per share between $0.30 and $0.35.
Earnings Call and Additional
InformationL Brands will conduct its first quarter
earnings call at 9:00 a.m. Eastern on May 24. To
listen, call 1-866-363-4673 (international dial-in number:
1-973-200-3978); conference ID 6798696. For an audio replay,
call 1-855-859-2056 (international replay number: 1-404-537-3406);
conference ID 6798696 or log onto www.LB.com. Additional
first 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
3,069 company-owned specialty stores in the United States, Canada,
the United Kingdom and Greater China, and its brands are sold in
more than 800 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 1995We caution 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 first quarter earnings call or made by our company
or our management 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 first quarter earnings call or otherwise
made by our company or our management:
- 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 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 manage
the life cycle of our brands, 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 vendor 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 associates
and manage labor-related costs;
- the ability of our vendors to deliver products in a timely
manner, meet quality standards and comply with applicable laws and
regulations;
- fluctuations in product input costs;
- our ability to adequately protect our assets from loss and
theft;
- 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,
third-party or company information;
- our ability to comply with regulatory requirements;
- legal and compliance matters; and
- tax, trade and other regulatory 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
first quarter earnings call to reflect circumstances existing after
the date of this press release 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 2017 Annual Report on Form 10-K.
For further information, please
contact:
L Brands:Investor Relations Amie
Preston(614) 415-6704
apreston@lb.com
Media RelationsTammy Roberts Myers(614)
415-7072communications@lb.com
L BRANDSFIRST QUARTER
2018
Comparable Sales Increase (Decrease) (Stores and
Direct):
|
FirstQuarter2018 |
|
FirstQuarter2017 |
|
|
|
|
Victoria’s Secret1 |
1% |
|
(14%) |
Bath & Body
Works1 |
8% |
|
2% |
L
Brands2 |
3% |
|
(9%) |
1 – Results include company-owned stores in the U.S. and Canada
and direct sales.2 – Results include company-owned stores in the
U.S., Canada, the U.K. and Greater China and direct sales.
Comparable Sales Increase (Decrease) (Stores
Only):
|
FirstQuarter2018 |
|
FirstQuarter2017 |
|
|
|
|
Victoria’s Secret1 |
(5%) |
|
(12%) |
Bath & Body
Works1 |
5% |
|
(1%) |
L
Brands2 |
(2%) |
|
(9%) |
1 – Results include company-owned stores in the U.S. and
Canada.2 – Results include company-owned stores in the U.S.,
Canada, the U.K. and Greater China.
Total Sales (Millions):
|
First Quarter 2018 |
|
FirstQuarter 2017 |
|
|
|
|
Victoria’s Secret1 |
$ |
1,235.9 |
|
$ |
1,246.5 |
Victoria’s Secret
Direct |
|
353.5 |
|
|
286.5 |
Total
Victoria’s Secret |
$ |
1,589.4 |
|
$ |
1,533.0 |
Bath & Body
Works1 |
$ |
648.6 |
|
$ |
588.4 |
Bath & Body Works
Direct |
|
111.8 |
|
|
89.6 |
Total
Bath & Body Works |
$ |
760.4 |
|
$ |
678.0 |
VS & BBW
International2 |
$ |
135.1 |
|
$ |
103.3 |
Other |
$ |
140.9 |
|
$ |
122.2 |
L
Brands |
$ |
2,625.8 |
|
$ |
2,436.5 |
1 – Results include company-owned stores in the U.S. and
Canada.2 – Results include retail sales from company-owned stores
outside of the U.S. and Canada, royalties associated with
franchised stores and wholesale sales.
Total Company-Owned Stores:
|
|
Stores |
|
|
Stores |
|
|
Operating |
|
|
Operating |
|
|
at 2/3/18 |
Opened |
Closed |
at 5/5/18 |
|
|
|
|
|
|
Victoria's Secret
U.S. |
|
984 |
1 |
(5 |
) |
980 |
PINK U.S. |
|
140 |
- |
- |
|
140 |
Victoria's Secret
Canada |
|
39 |
- |
- |
|
39 |
PINK Canada |
|
7 |
- |
(1 |
) |
6 |
Total
Victoria’s Secret |
|
1,170 |
1 |
(6 |
) |
1,165 |
|
|
|
|
|
|
Bath & Body Works
U.S. |
|
1,592 |
13 |
(11 |
) |
1,594 |
Bath & Body Works
Canada |
|
102 |
- |
- |
|
102 |
Total
Bath & Body Works |
|
1,694 |
13 |
(11 |
) |
1,696 |
|
|
|
|
|
|
Victoria’s Secret
U.K./Ireland |
|
19 |
- |
- |
|
19 |
PINK U.K. |
|
5 |
- |
- |
|
5 |
Victoria’s Secret
Beauty and Accessories |
|
29 |
- |
- |
|
29 |
Victoria’s Secret
China |
|
7 |
- |
- |
|
7 |
Total VS
& BBW International |
|
60 |
- |
- |
|
60 |
|
|
|
|
|
|
Henri Bendel |
|
27 |
- |
(3 |
) |
24 |
La Senza U.S. |
|
5 |
- |
- |
|
5 |
La Senza Canada |
|
119 |
- |
- |
|
119 |
Total L Brands
Stores |
|
3,075 |
14 |
(20 |
) |
3,069 |
Total Noncompany-Owned Stores:
|
|
Stores |
|
|
Stores |
|
|
Operating |
Operating |
|
|
at 2/3/18 |
Opened |
Closed |
At 5/5/18 |
|
|
|
|
|
|
Victoria’s Secret
Beauty & Accessories – Travel Retail |
|
156 |
11 |
(4 |
) |
163 |
Bath & Body Works –
Travel Retail |
|
9 |
- |
(2 |
) |
7 |
Victoria’s Secret
Beauty & Accessories |
|
241 |
2 |
(6 |
) |
237 |
Victoria’s Secret |
|
32 |
5 |
- |
|
37 |
PINK |
|
5 |
1 |
- |
|
6 |
Bath & Body
Works |
|
176 |
13 |
(1 |
) |
188 |
La Senza |
|
194 |
- |
(2 |
) |
192 |
Total |
|
813 |
32 |
(15 |
) |
830 |
|
|
|
|
|
|
|
|
|
|
|
|
L BRANDS, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
INCOME |
THIRTEEN WEEKS ENDED MAY 5, 2018 AND APRIL 29,
2017 |
(Unaudited) |
(In thousands except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
Net Sales |
$ |
2,625,846 |
|
|
$ |
2,436,523 |
|
|
Costs of Goods Sold, Buying and Occupancy |
|
(1,682,016 |
) |
|
|
(1,533,673 |
) |
|
Gross Profit |
|
943,830 |
|
|
|
902,850 |
|
|
General,
Administrative and Store Operating Expenses |
|
(789,023 |
) |
|
|
(693,658 |
) |
|
Operating Income |
|
154,807 |
|
|
|
209,192 |
|
|
Interest Expense |
|
(97,899 |
) |
|
|
(100,608 |
) |
|
Other Income |
|
1,401 |
|
|
|
9,863 |
|
|
|
|
|
|
|
|
Income
Before Income Taxes |
|
58,309 |
|
|
|
118,447 |
|
|
Provision for Income Taxes |
|
10,792 |
|
|
|
24,393 |
|
|
|
|
|
|
|
|
Net Income |
$ |
47,517 |
|
|
$ |
94,054 |
|
|
|
|
|
|
|
|
Net Income Per Diluted Share |
$ |
0.17 |
|
|
$ |
0.33 |
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding |
|
281,587 |
|
|
|
289,327 |
|
|
|
|
|
|
|
|
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