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L Brands Reports First Quarter Earnings

Updates Earnings Guidance

COLUMBUS, Ohio, May 23, 2018 (GLOBE NEWSWIRE) -- 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 Outlook
The 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 Information
L 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 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 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 Relations
Tammy Roberts Myers
(614) 415-7072
communications@lb.com

L BRANDS
FIRST QUARTER 2018

Comparable Sales Increase (Decrease) (Stores and Direct):

  First
Quarter
2018
  First
Quarter
2017
       
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):

  First
Quarter
2018
  First
Quarter
2017
       
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
  First
Quarter
 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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