2014

Limited Brands Reports a 39% Increase in Adjusted and a 72% Increase in Reported Third Quarter Earnings Per Share —PROVIDES FOURTH QUARTER AND RAISES FULL YEAR 2011 EARNINGS GUIDANCE—

COLUMBUS, Ohio, Nov. 16, 2011 /PRNewswire/ -- Limited Brands, Inc. (NYSE: LTD) today reported 2011 third quarter results and increased its 2011 full-year earnings guidance.

(Logo:  http://photos.prnewswire.com/prnh/20020520/CLM001LOGO )

Third Quarter Results

Adjusted earnings per share for the third quarter ended Oct. 29, 2011 increased 39% to $0.25 compared to earnings per share of $0.18 for the quarter ended Oct. 30, 2010, which exclude an income tax benefit in 2011 as detailed below.  Third quarter operating income was $186.1 million compared to operating income of $149.1 million last year, and adjusted net income was $77.6 million compared to net income of $61.3 million last year.

The 2011 adjusted results above exclude an income tax benefit, primarily due to the resolution of certain tax matters, of $16.7 million, or $0.06 per share.  Including this benefit, 2011 net income was $94.3 million and earnings per share were $0.31.

Comparable store sales for the third quarter increased 9 percent, and net sales were $2.173 billion compared to $1.983 billion last year.  

At the conclusion of this press release is a reconciliation of reported to adjusted results.

2011 Outlook

The company stated that it expects adjusted fourth quarter earnings of $1.28 to $1.43 per share.  For 2011, the company increased its adjusted earnings per share forecast to $2.38 to $2.53 from $2.35 to $2.50 previously.

Earnings Call Information

Limited Brands will conduct its third quarter earnings call at 9 a.m. Eastern time on Thursday, Nov. 17.  To listen, call 1-866-583-6618 (international dial-in number: 1-937-200-3978).  For an audio replay, call 1-866-NEWS-LTD (international replay number: 1-706-902-3452) or log onto www.Limitedbrands.com.  Additional third quarter financial information is also available at www.Limitedbrands.com.

ABOUT LIMITED BRANDS:

Limited Brands, through Victoria's Secret, Pink, Bath & Body Works, La Senza and Henri Bendel, is an international company.  The company operates 2,628 specialty stores in the United States and its brands are sold in more than 600 company-operated and 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.

Limited Brands b-roll footage of stores is available through our online newsroom.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Limited 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 third 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 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 third 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 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 international markets and related risks;
  • our independent licensees and franchisees;
  • our direct channel business;
  • 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 reliance on foreign sources of production, including risks related to:
    • political instability;
    • duties, taxes and other charges on imports;
    • legal and regulatory matters;
    • volatility in currency exchange rates;
    • local business practices and political issues;
    • potential delays or disruptions in shipping and related pricing impacts;
    • the disruption of imports 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 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;
  • 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 third 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 2010 Annual Report on Form 10-K.

Adjusted information which provides non-GAAP financial information and estimates is presented in order to improve investors' understanding of historical and expected results and improve comparability of financial information from period to period.

LIMITED BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

THIRTEEN WEEKS ENDED OCTOBER 29, 2011 AND OCTOBER 30, 2010

(Unaudited)

(In thousands except per share amounts)






















2011


2010

Net Sales

$             2,173,420


$             1,983,372

Cost of Goods Sold, Buying and Occupancy

(1,388,143)


(1,269,080)

Gross Profit

785,277


714,292

General, Administrative and Store Operating Expenses

(599,175)


(565,194)

Operating Income

186,102


149,098

Interest Expense

(63,860)


(47,224)

Interest Income

319


461

Other Income

(687)


(832)





Income Before Income Taxes

121,874


101,503

Provision for Income Taxes

27,597


40,176





Net Income

$                  94,277


$                  61,327





Net Income Per Diluted Share

$                      0.31


$                      0.18





Weighted Average Shares Outstanding

307,928


331,981



LIMITED BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

THIRTEEN WEEKS ENDED OCTOBER 29, 2011 AND OCTOBER 30, 2010

(Unaudited)

(In thousands except per share amounts)
















































2011


2010












Reported


Adjustments


Adjusted


Reported

Net Sales

$             2,173,420


$                            -


$             2,173,420


$             1,983,372

Cost of Goods Sold,









Buying & Occupancy

(1,388,143)


-


(1,388,143)


(1,269,080)

Gross Profit

785,277


-


785,277


714,292

General, Administrative and









Store Operating Expenses

(599,175)


-


(599,175)


(565,194)

Operating Income

186,102


-


186,102


149,098

Interest Expense

(63,860)


-


(63,860)


(47,224)

Interest Income

319


-


319


461

Other (Expense) Income

(687)


-


(687)


(832)










Income Before Income Taxes

121,874


-


121,874


101,503

Provision for Income Taxes

27,597


16,691


44,288


40,176



















Net Income

$                  94,277


$                 (16,691)


$                  77,586


$                  61,327










Net Income Per Diluted Share

$                      0.31




$                      0.25


$                      0.18










Weighted Average Shares Outstanding

307,928




307,928


331,981



















See Notes to Consolidated Statements of Income and Reconciliation of Adjusted Results for additional information.



LIMITED BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

THIRTY-NINE WEEKS ENDED OCTOBER 29, 2011 AND OCTOBER 30, 2010

(Unaudited)

(In thousands except per share amounts)






















2011


2010

Net Sales

$             6,848,572


$             6,157,417

Cost of Goods Sold, Buying and Occupancy

(4,319,469)


(3,971,381)

Gross Profit

2,529,103


2,186,036

General, Administrative and Store Operating Expenses

(1,932,645)


(1,615,504)

Operating Income

596,458


570,532

Interest Expense

(182,788)


(160,095)

Interest Income

1,101


1,707

Other Income

231,767


120,282





Income Before Income Taxes

646,538


532,426

Provision for Income Taxes

155,897


179,932





Net Income

$                490,641


$                352,494





Net Income Per Diluted Share

$                      1.55


$                      1.06





Weighted Average Shares Outstanding

317,067


332,874



LIMITED BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

THIRTY-NINE WEEKS ENDED OCTOBER 29, 2011 AND OCTOBER 30, 2010

(Unaudited)

(In thousands except per share amounts)




































































2011


2010
















Reported


Adjustments


Adjusted


Reported


Adjustments


Adjusted

Net Sales

$             6,848,572


$                            -


$             6,848,572


$             6,157,417


$                            -


$             6,157,417

Cost of Goods Sold,













Buying & Occupancy

(4,319,469)


-


(4,319,469)


(3,971,381)


-


(3,971,381)

Gross Profit

2,529,103


-


2,529,103


2,186,036


-


2,186,036

General, Administrative and













Store Operating Expenses

(1,932,645)


163,428


(1,769,217)


(1,615,504)


-


(1,615,504)

Operating Income

596,458


163,428


759,886


570,532


-


570,532

Interest Expense

(182,788)


-


(182,788)


(160,095)


-


(160,095)

Interest Income

1,101


-


1,101


1,707


-


1,707

Other (Expense) Income

231,767


(233,478)


(1,711)


120,282


(95,383)


24,899














Income Before Income Taxes

646,538


(70,050)


576,488


532,426


(95,383)


437,043

Provision for Income Taxes

155,897


62,456


218,353


179,932


(7,689)


172,243














Net Income

$                490,641


$               (132,506)


$                358,135


$                352,494


$                 (87,694)


$                264,800














Net Income Per Diluted Share

$                      1.55




$                      1.13


$                      1.06




$                      0.80














Weighted Average Shares Outstanding

317,067




317,067


332,874




332,874








































See Notes to Consolidated Statements of Income and Reconciliation of Adjusted Results for additional information.



LIMITED BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED STATEMENTS OF INCOME AND
RECONCILIATION OF ADJUSTED RESULTS
(Unaudited)

The "Adjusted Results" provided in the attached unaudited Consolidated Statements of Income and Reconciliation of Adjusted Results are non-GAAP financial measures and reflect the following:

Fiscal 2011

In the third quarter of 2011, adjusted results exclude the following:

  • A $16.7 million tax benefit related to the favorable resolution of certain discrete income tax matters.

In the second quarter of 2011, adjusted results exclude the following:

  • A $147.1 million non-taxable gain, included in other income and expense, and associated pre-tax expense of $113.4 million, included in general, administrative and store operating expenses, associated with our charitable contribution of Express, Inc. common stock to The Limited Brands Foundation.

In the first quarter of 2011, adjusted results exclude the following:

  • An $86.4 million pre-tax gain ($55.6 million net of tax), included in other income and expense, related to the sale of shares of Express, Inc. common stock.

  • A $50.0 million pre-tax expense ($31.2 million net of tax), included in general, administrative and store operating expenses, related to a pledge to The Limited Brands Foundation.

  • An $11.0 million tax benefit primarily related to the favorable resolution of certain discrete income tax matters.

Fiscal 2010

In the second quarter of 2010, adjusted results exclude the following:

  • A $52.3 million pre-tax gain ($31.8M net of tax), included in other income and expense, related to the initial public offering of Express including the sale of a portion of the company's shares.  

  • A $19.7 million pre-tax gain, included in other income and expense, and a related net tax benefit of $22.4 million, associated with the sale of our remaining 25% interest in Limited Stores.    

  • A $25.2 million pre-tax loss ($15.8M net of tax), included in other income and expense, associated with the early retirement of portions of our 2012 and 2014 maturity bonds.  

In the first quarter of 2010, adjusted results exclude the following:

  • A $48.7 million pre-tax gain ($29.6 million net of tax), included in other income and expense, related to a $56.5 million cash distribution from Express.

The Unaudited Adjusted Consolidated Statements of Income should not be construed as an alternative to the reported results determined in accordance with generally accepted accounting principles.  Further, the Company's definition of adjusted income information may differ from similarly titled measures used by other companies.  While it is not possible to predict future results, management believes the adjusted information is useful for the assessment of the ongoing operations of the Company. The Unaudited Adjusted Consolidated Statements of Income should be read in conjunction with the Company's historical financial statements and notes thereto contained in the Company's quarterly reports on Form 10-Q and annual report on Form 10-K.

SOURCE Limited Brands



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