L Brands Reports First Quarter 2014 Earnings -- PROVIDES SECOND QUARTER AND UPDATES FULL YEAR 2014 EARNINGS GUIDANCE --

COLUMBUS, Ohio, May 21, 2014 /PRNewswire/ -- L Brands, Inc. (NYSE: LB) today reported 2014 first quarter results.

First Quarter Results
Earnings per share for the first quarter ended May 3, 2014, increased 10% to $0.53 compared to $0.48 for the quarter ended May 4, 2013.  First quarter operating income was $336.1 million compared to $311.2 million last year, and net income was $157.0 million compared to $142.5 million last year. 

The company reported net sales of $2.391 billion for the 13 weeks ended May 3, 2014, an increase of 5% compared to sales of $2.268 billion for the 13 weeks ended May 4, 2013.  Comparable stores sales increased 2% for the 13 weeks ended May 3, 2014.

2014 Outlook
The company stated that it expects 2014 second quarter earnings per share to be $0.57 to $0.62 compared to earnings per share of $0.61 per share last year. 

For 2014, the company expects earnings per share of $3.00 to $3.15 versus its previous guidance of $3.00 to $3.20.  The updated guidance reflects an estimated negative impact of about $0.10 to $0.12 related to the exit of certain non-core categories in the Victoria's Secret direct and beauty businesses to allow the brand to focus on faster growing, more profitable product lines.

Earnings Call Information
L Brands will conduct its first quarter earnings call at 9:15 a.m. Eastern on May 22.  To listen, call 1-866-583-6618 (international dial-in number: 1-937-200-3978).  For an audio replay, call 1-866-639-7583 (international replay number: 1-706-902-3452) 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 2,923 company-owned specialty stores in the United States, Canada and the United Kingdom and its brands are sold in about 600 franchised additional locations world-wide.  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 1995

L Brands, Inc. cautions 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 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:

  • 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 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;
    • disruption due to labor disputes; and
    • changing expectations regarding product safety due to new legislation;
  • fluctuations in foreign currency exchange rates;
  • 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-related 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 maintain the security of customer, associate, supplier or company information;
  • our failure to comply with regulatory requirements;
  • tax matters; and
  • legal and compliance 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 report 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 2013 Annual Report on Form 10-K.

L BRANDS
FIRST QUARTER 2014

 

Comparable Store Sales Increase (Decrease):




First

Quarter

2014


First

Quarter

2013








Victoria's Secret1


2%


3%


Bath & Body Works1


2%


3%


L Brands


2%


3%


Victoria's Secret

Direct Sales


0%


(6%)



1 – Results include company-owned stores in the United States and Canada.

 

Total Sales (Millions):



First Quarter

 2014


First Quarter

 2013







Victoria's Secret Stores1

$ 1,245.3


$ 1,184.6


Victoria's Secret Direct

358.3


359.1


  Total Victoria's Secret

$ 1,603.6


$ 1,543.7


Bath & Body Works1

$ 530.2


$ 517.1


Bath & Body Works Direct

51.4


43.7


  Total Bath & Body Works

$ 581.6


$ 560.8


VS & BBW International2

$  71.0


$  40.4


Other

$ 135.0


$ 123.1


L Brands

$ 2,391.2


$ 2,268.0




1

Results include company-owned stores in the United States and Canada.

2

Results include retail sales from company-owned stores outside of the United States and Canada, royalties associated with franchised stores and wholesale sales.

 

Total Company-Owned Stores:




Stores


Stores



Operating

Operating



at 2/1/14

Opened

  Closed

at 5/3/14







Victoria's Secret U.S.


977

1

(2)

976

PINK U.S.


83

6

-

89

Victoria's Secret Canada


24

1

-

25

PINK Canada


10

-

-

10

   Total Victoria's Secret


1,094

8

(2)

1,100







Bath & Body Works U.S.


1,559

1

(7)

1,553

Bath & Body Works Canada 


79

3

(1)

81

   Total Bath & Body Works


1,638

4

(8)

1,634







Victoria's Secret U.K.


5

2

-

7

Henri Bendel


29

-

-

29

La Senza Canada


157

-

(4)

153

Total L Brands


2,923

14

(14)

2,923

 

Total Franchise Stores:



Stores


Stores


Operating

Operating


at 2/1/14

Opened

Closed

at 5/3/14






Victoria's Secret Beauty & Accessories

198

13

(2)

209

VS International (Full Assortment)

4

2

-

6

BBW International

55

4

-

59

La Senza International

331

-

(3)

328

Total Franchise

588

19

(5)

602

 

 

L BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME  

THIRTEEN WEEKS ENDED MAY 3, 2014 AND MAY 4, 2013

(Unaudited)

(In millions except per share amounts) 












































%









Increase


Increase




2014



2013


(Decrease)


(Decrease)























Net Sales


$          2,391.2



$          2,268.0


$             123.2


5%

Comparable Store Sales


2%



3%
















Gross Profit


982.1



941.4


40.7


4%


% of Sales


41.1%



41.5%


 (40 bp's) 














General, Administrative and











Store Operating Expenses


646.0



630.2


15.8


2%


% of Sales


27.0%



27.8%


 80 bp's 














Operating Income


336.1



311.2


24.9


8%


% of Sales


14.1%



13.7%


 40 bp's 














Interest Expense and Other


80.7



76.4


4.3


6%












Income Before Income Taxes


255.4



234.8


20.6


9%












Provision for Income Taxes


98.5



92.3


6.2


7%


% of Pre-Tax Income


38.5%



39.3%
















Net Income 


$             156.9



$             142.5


$               14.4


10%


% of Sales


6.6%



6.3%


 30 bp's 














Net Income Per Diluted Share


$               0.53



$               0.48


$               0.05


10%












Weighted Average Shares Outstanding


297.3



295.2





 

Logo - http://photos.prnewswire.com/prnh/20140130/CL56250LOGO

SOURCE L Brands, Inc.



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