- Provides Third Quarter and Raises Full Year 2008 Earnings Guidance -
COLUMBUS, Ohio, Aug. 20 /PRNewswire-FirstCall/ -- Limited Brands, Inc.
(NYSE: LTD) today reported 2008 second quarter results.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020520/CLM001LOGO )
Leslie Wexner, chairman and chief executive officer, stated, "We are
very pleased with our performance in this challenging economic environment.
Our disciplined management of inventory and expenses resulted in earnings
per share that exceeded our initial expectations and increased 35% over
last year's comparable result in spite of negative same store sales in the
quarter. Although we expect that the environment will continue to remain
challenging, we will continue to conservatively manage the financial
aspects of the business while at the same time provide compelling
assortments and exciting store experiences to build our brands."
Second Quarter Results
Earnings per share for the second quarter ended Aug. 2, 2008, were
$0.30 compared to $0.67 last year. Second quarter operating income was
$185.2 million compared to $318.9 million last year, and net income was
$102.0 million compared to $264.4 million last year.
The 2008 results include a pre-tax gain of $13.3 million (included in
other income), or $0.02 per share, related to a $71 million cash
distribution from Express. The 2007 results contain certain significant
items totaling $0.47 per share. These items include:
-- A pre-tax gain of $302 million, or $0.46 per share, related to the
divestiture of a 75% interest in Express to affiliates of Golden Gate
Capital;
-- A pre-tax loss of $73 million, or $0.20 per share, related to the
divestiture of a 75% interest in Limited Stores to affiliates of Sun
Capital Partners;
-- A tax benefit of $39 million, or $0.10 per share, related to an
adjustment to state net operating loss valuation allowances in connection
with the divestiture of the apparel brands;
-- A pre-tax gain of $100 million, or $0.15 per share, related to the
refinancing of Easton Town Center, in which the company has an investment
interest, included in other income;
-- A pre-tax restructuring charge of $47 million, or $0.07 per share,
for costs of disposing of non-core assets and severance related to the
termination of approximately 10% of the company's home office associates;
and
-- A pre-tax gain of $17 million, or $0.02 per share, related to an
interest rate hedge entered into in the first quarter in anticipation of
the intended financing of the La Senza acquisition, included in other
income.
Excluding these items, second quarter earnings per share were $0.27
compared to $0.20 last year, an increase of 35%. Second quarter operating
income was $185.2 million compared to $142.3 million last year; and net
income was $93.9 million compared to $80.6 million last year.
Comparable store sales for the second quarter decreased 7 percent, and
net sales were $2.284 billion compared to $2.624 billion last year.
2007 net sales include Express sales through July 6, 2007, the closing
date of the sale of a majority interest to affiliates of Golden Gate
Capital, and Limited Stores sales through Aug. 3, 2007, the closing date of
the transfer of a majority interest to affiliates of Sun Capital Partners.
2008 Outlook
The company stated that it expects 2008 third quarter earnings per
share to be $0.00 to $0.04 compared to a loss of $0.01 per share last year,
which excludes a $0.04 per share gain from asset sales in 2007.
For 2008, the company expects earnings per share of $1.45 to $1.60,
excluding first half significant items of $0.20 per share.
Earnings Call Information
Limited Brands will conduct its second quarter earnings call at 9 a.m.
Eastern time on Thursday, Aug. 21. To listen, call 1-866-583-6618
(International Dial-In Number: 1-706-643-0382). For an audio replay, call
1-866-NEWS-LTD (International Replay Number: 1-706-902-3452) or log onto
http://www.Limitedbrands.com. Additional second quarter financial information is
also available at http://www.Limitedbrands.com.
ABOUT LIMITED BRANDS:
Limited Brands, through Victoria's Secret, Pink, Bath & Body Works,
C.O. Bigelow, La Senza, White Barn Candle Co. and Henri Bendel, presently
operates 2,992 specialty stores. The company's products are also available
online at http://www.VictoriasSecret.com, http://www.BathandBodyWorks.com,
http://www.HenriBendel.com and http://www.LaSenza.com.
Safe Harbor Statement Under the Private Securities Litigation Reform
Act of 1995
We 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 second quarter earnings call involve risks and
uncertainties and are subject to change based on various important 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 second quarter earnings
call:
-- general economic conditions, consumer confidence and consumer spending
patterns;
-- the dependence on a high volume of mall traffic and the possible lack
of availability of suitable store locations on appropriate terms;
-- the seasonality of our business;
-- our ability to grow through new store openings and existing store
remodels and expansions;
-- our ability to expand into international markets;
-- independent licensees;
-- our direct channel business including risks associated with our new
distribution center;
-- our failure to protect our reputation and our brand images;
-- our failure to protect our trade names and trademarks;
-- market disruptions including severe weather conditions, natural
disasters, health hazards, terrorist activities or the prospect of
these events;
-- stock price volatility;
-- our failure to maintain our credit rating;
-- our ability to service our debt;
-- the highly competitive nature of the retail industry generally and the
segments in which we operate, particularly risks associated with
consumer acceptance of our products and our ability to keep up with
fashion trends, develop new merchandise, launch new product lines
successfully, offer products at the appropriate price points and
enhance our brand image;
-- our ability to retain key personnel;
-- our ability to attract, develop and retain qualified employees and
manage labor costs;
-- our reliance on foreign sources of production, including risks related
to:
-- political instability,
-- duties, taxes, other charges on imports,
-- legal and regulatory matters,
-- currency and exchange rates,
-- local business practices and political issues,
-- potential delays or disruptions in shipping and related pricing
impacts and
-- the disruption of imports by labor disputes;
-- the possible inability of our manufacturers to deliver products in a
timely manner or meet quality standards;
-- rising energy costs;
-- increases in the costs of mailing, paper and printing;
-- our ability to implement and sustain information technology systems;
and
-- our failure to comply with regulatory requirements.
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 second 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.
LIMITED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THIRTEEN WEEKS ENDED AUGUST 2, 2008 AND AUGUST 4, 2007
(Unaudited)
(In thousands except per share amounts)
2008 2007
Net Sales $2,284,314 $2,624,077
Gross Profit 760,375 811,021
General, Administrative and Store
Operating Expenses (575,216) (721,992)
Gain on Divestiture of Express - 302,412
Loss on Divestiture of Limited Stores - (72,538)
Operating Income 185,159 318,903
Interest Expense (46,729) (30,847)
Interest Income 5,625 3,388
Other Income 17,730 116,165
Minority Interest 2,734 15,744
Income Before Income Taxes 164,519 423,353
Provision for Income Taxes 62,475 159,000
Net Income $102,044 $264,353
Net Income Per Diluted Share $0.30 $0.67
Weighted Average Shares Outstanding 341,468 395,996
Certain prior year amounts have been reclassified to conform with the
current year presentation.
LIMITED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
TWENTY-SIX WEEKS ENDED AUGUST 2, 2008 AND AUGUST 4, 2007
(Unaudited)
(In thousands except per share amounts)
2008 2007
Net Sales $4,209,395 $4,934,920
Gross Profit 1,401,492 1,605,779
General, Administrative and Store
Operating Expenses (1,115,897) (1,408,225)
Gain on Divestiture of Express - 302,412
Loss on Divestiture of Limited Stores - (72,538)
Net Gain on Joint Ventures 108,962 -
Operating Income 394,557 427,428
Minority Interest 3,733 21,597
Interest Expense (91,749) (56,210)
Interest Income 11,178 6,136
Other Income 22,313 116,330
Income Before Income Taxes 340,032 515,281
Provision for Income Taxes 140,207 198,000
Net Income $199,825 $317,281
Net Income Per Diluted Share $0.58 $0.79
Weighted Average Shares Outstanding 342,808 401,080
Certain prior year amounts have been reclassified to conform with the
current year presentation.
SOURCE Limited Brands
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Related links:
http://www.limitedbrands.com
http://www.VictoriasSecret.com
http://www.BathandBodyWorks.com
http://www.HenriBendel.com http://www.LaSenza.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20020520/CLM001LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Investor Relations, Amie Preston,
+1-614-415-6704, apreston@limitedbrands.com, or Media Relations,
Tammy Roberts Myers, +1-614-415-7072, extcomm@limitedbrands.com,
both of Limited Brands
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