L Brands Reports Second Quarter-to-Date 2021 Sales and Increases Second Quarter Earnings Guidance
July 13 2021 - 4:03PM
L Brands, Inc. (NYSE: LB) reported net sales of $2.351 billion for
the nine weeks ended July 3, 2021, compared to net sales of $1.369
billion for the nine weeks ended July 4, 2020. Second quarter 2020
sales were negatively impacted by the closure of stores for
approximately half the quarter due to the COVID-19 pandemic. Sales
for the first nine weeks of the second quarter of 2021 increased 12
percent compared to sales of $2.101 billion for the same period of
2019.
Bath & Body Works net sales were $1.239
billion for the nine-week period ended July 3, 2021, compared to
net sales of $743.5 million for the nine weeks ended July 4, 2020.
Bath & Body Works sales for the first nine weeks of the second
quarter of 2021 increased 48 percent compared to the same period of
2019.
Victoria’s Secret net sales were $1.112 billion
for the nine-week period ended July 3, 2021, compared to net sales
of $625.7 million for the nine weeks ended July 4, 2020. Victoria’s
Secret comparable sales for the first nine weeks of the second
quarter of 2021 increased 3 percent compared to the same period in
2019.
Second quarter-to-date sales in 2021 for both
Bath & Body Works and Victoria’s Secret were negatively
impacted by a later start to their semi-annual sales compared to
2019.
The company currently expects to report second
quarter earnings per share between $1.20 and $1.30, compared to its
previous guidance of $0.80 to $1.00. Under its current
segment reporting, the company currently expects to report second
quarter operating income of more than $400 million for the Bath
& Body Works segment, and more than $200 million for the
Victoria’s Secret segment. The increase to the company’s previous
second quarter earnings guidance was principally driven by higher
than forecasted merchandise margin rates, as strong customer
response to merchandise assortments and disciplined inventory
management enabled a reduction in promotional activity. The company
plans to report second quarter earnings after the close of the
market on August 18, 2021.
Bath & Body Works Capital Structure
ActionsThe company also today announced the go-forward capital
structure for the standalone Bath & Body Works business,
subsequent to the spin-off of Victoria’s Secret & Co. The Bath
& Body Works capital structure will include:
- An authorization of a new $1.5
billion share repurchase program. This program will replace the
previous $500 million share repurchase program announced in March
2021, which had $36.2 million remaining. Under this previous
program, the company had repurchased a total of 7 million shares
for $463.8 million.
- An intent to reduce debt by up to
$500 million.
- A targeted adjusted debt to EBITDAR
leverage ratio in the mid-2x range.
- The continuation of L Brands’
current annual dividend of $0.60 per share.
ABOUT L BRANDS:L Brands, through Bath &
Body Works, Victoria’s Secret and PINK, is an international
company. The company operates 2,684 company-operated specialty
stores in the United States, Canada and Greater China, in more than
700 franchised locations worldwide and through its websites
worldwide.
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 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
otherwise made by our company or our management:
- the spin-off of the Victoria’s
Secret business (the “spin-off”) may not be consummated within the
anticipated time period or at all;
- disruption to our business in
connection with the proposed spin-off and that we could lose
revenue as a result of such disruption;
- the spin-off may not be tax-free
for U.S. federal income tax purposes;
- a loss of synergies from separating
the businesses that could negatively impact the balance sheet,
profit margins or earnings of both businesses or that the companies
resulting from the spin-off do not realize all of the expected
benefits of the spin-off;
- the combined value of the common
stock of the two publicly-traded companies will not be equal to or
greater than the value of our common stock had the spin-off not
occurred;
- Victoria’s Secret has no history of
operating as an independent company, and its historical combined
and unaudited pro forma financial information is not necessarily
representative of the results that it would have achieved as an
independent, publicly traded company and may not be a reliable
indicator of our future results;
- general economic conditions,
consumer confidence, consumer spending patterns and market
disruptions including pandemics or significant health hazards,
severe weather conditions, natural disasters, terrorist activities,
financial crises, political crises or other major events, or the
prospect of these events;
- the novel coronavirus (COVID-19)
global pandemic has had and is expected to continue to have an
adverse effect on our business and results of operations;
- the seasonality of our
business;
- divestitures or other dispositions,
including a spin-off of Victoria’s Secret and related operations
and contingent liabilities from businesses that we have
divested;
- difficulties arising from turnover
in company leadership or other key positions;
- our ability to attract, develop and
retain qualified associates and manage labor-related costs;
- 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 operate
and 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 maintain, enforce
and 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,
environmental hazards or natural disasters;
- significant health hazards or
pandemics, which could result in closed factories, reduced
workforces, scarcity of raw materials, and scrutiny or embargoing
of goods produced in infected areas;
- 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;
- 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, printing or other order fulfillment logistics;
- claims arising from our
self-insurance;
- our and our third-party service
providers' ability to implement and maintain information technology
systems and to protect associated data;
- our ability to maintain the
security of customer, associate, third-party and company
information;
- stock price volatility;
- our ability to pay dividends and
related effects;
- shareholder activism matters;
- our ability to maintain our credit
rating;
- our ability to service or refinance
our debt and maintain compliance with our restrictive
covenants;
- our ability to comply with laws,
regulations and technology platform rules or other obligations
related to data privacy and security;
- 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 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.
The company has filed a registration statement
(including a prospectus) with the Securities and Exchange
Commission (the “SEC”). Before you invest in any securities of the
company, you should read the prospectus in that registration
statement, the prospectus supplement for the relevant offering and
other documents the company has filed with the SEC for more
complete information about the company and the relevant offering.
You may get these documents for free by visiting EDGAR on the SEC
web site at www.sec.gov. Alternatively, the company, any
underwriter or any dealer participating in the relevant offering
will arrange to send you the prospectus if you request it by
emailing investorrelations@lb.com.
For further information, please
contact:
L Brands: |
|
Investor Relations |
Media Relations |
Amie Preston |
Brooke Wilson |
(614) 415-6704 |
(614) 415-6042 |
apreston@lb.com |
communications@lb.com |
L BRANDSSECOND
QUARTER-TO-DATE 2021
Total Sales (Millions):
|
Second Quarter-to-Date 2021 |
|
Second Quarter-to-Date 2020 |
|
%Inc/(Dec) |
|
Second Quarter-to-Date 2021 |
|
Second Quarter-to-Date 2019 |
|
%Inc/(Dec) |
|
|
|
|
|
|
|
|
|
|
|
|
Bath & Body Works Stores – U.S. and Canada |
$ |
898.6 |
|
$ |
327.3 |
|
174.6 |
% |
|
$ |
898.6 |
|
$ |
668.4 |
|
34.4 |
% |
Bath & Body Works Direct |
|
295.9 |
|
|
377.9 |
|
(21.7 |
%) |
|
|
295.9 |
|
|
136.3 |
|
117.1 |
% |
Bath & Body Works
International1 |
|
44.5 |
|
|
38.3 |
|
16.2 |
% |
|
|
44.5 |
|
|
31.7 |
|
40.4 |
% |
Total Bath & Body
Works |
$ |
1,239.0 |
|
$ |
743.5 |
|
66.6 |
% |
|
$ |
1,239.0 |
|
$ |
836.4 |
|
48.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Victoria’s Secret Stores – U.S.
and Canada |
$ |
719.5 |
|
$ |
149.3 |
|
381.9 |
% |
|
$ |
719.5 |
|
$ |
880.5 |
|
(18.3 |
%) |
Victoria’s Secret Direct |
|
315.2 |
|
|
418.7 |
|
(24.7 |
%) |
|
|
315.2 |
|
|
255.0 |
|
23.6 |
% |
Victoria’s Secret
International2 |
|
77.2 |
|
|
57.7 |
|
33.8 |
% |
|
|
77.2 |
|
|
119.0 |
|
(35.1 |
%) |
Total Victoria’s
Secret |
$ |
1,111.9 |
|
$ |
625.7 |
|
77.7 |
% |
|
$ |
1,111.9 |
|
$ |
1,254.5 |
|
(11.4 |
%) |
Other |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
9.6 |
|
- |
|
L Brands |
$ |
2,350.9 |
|
$ |
1,369.2 |
|
71.7 |
% |
|
$ |
2,350.9 |
|
$ |
2,100.5 |
|
11.9 |
% |
1 – Results include royalties associated with franchised stores
and wholesale sales. 2 – Results include company-operated stores in
the U.K. (pre-joint venture) and Greater China, royalties
associated with franchised stores and wholesale sales.
Total Company-Operated Stores:
|
|
|
|
|
|
Stores at 1/30/21 |
Opened |
Closed |
Stores at 7/3/21 |
|
|
|
|
|
|
|
|
|
|
Bath & Body Works |
1,633 |
31 |
(10 |
) |
1,654 |
Bath & Body Works
Canada |
103 |
- |
- |
|
103 |
Total Bath and Body Works |
1,736 |
31 |
(10 |
) |
1,757 |
|
|
|
|
|
Victoria's Secret |
703 |
- |
(7 |
) |
696 |
PINK |
143 |
- |
- |
|
143 |
Victoria's Secret Canada |
23 |
1 |
- |
|
24 |
PINK Canada |
2 |
- |
- |
|
2 |
Victoria’s Secret Beauty and
Accessories |
36 |
1 |
(1 |
) |
36 |
Victoria’s Secret Greater
China |
26 |
- |
- |
|
26 |
Total Victoria's Secret |
933 |
2 |
(8 |
) |
927 |
|
|
|
|
|
Total L
Brands |
2,669 |
33 |
(18 |
) |
2,684 |
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