Exhibit 99.1
LIMITED BRANDS REPORTS 2003 FIRST QUARTER EARNINGS
Columbus, Ohio, May 19, 2003 -- Limited Brands (NYSE: LTD) today reported 2003
first quarter results.
On a reported basis, earnings per share were $0.19 for the first quarter
compared to $0.10 last year. Operating income was $109.1 million compared to
$94.3 million last year, and net income was $97.5 million compared to $49.9
million last year.
On an adjusted basis, first quarter earnings per share were $0.09 compared to
$0.14 last year, operating income was $109.1 million compared to $128.1 million
last year, and net income was $49.8 million compared to $76.9 million last year.
Comparable store sales for the quarter ended May 3, 2003 were negative 1% and
net sales of $1.842 billion increased 2% compared to sales of $1.799 billion
last year.
The Company stated that it is comfortable with the current First Call second
quarter earnings estimate of $0.16 per share, and full year 2003 earnings growth
of 0 to 5% versus last year's adjusted earnings per share result of $0.99.
Adjusted Results
Adjusted results, which are non-GAAP financial measures, are presented in order
to improve investors' understanding of financial results and improve
comparability of financial information from period to period. Please refer to
the attached income statements for the quarter for a reconciliation of reported
and adjusted results. Adjusted results as reported above include the following:
Adjustment Related to Alliance Data Systems:
.. Adjustment to exclude a first quarter 2003 pretax non-operating gain of
$79.7 million, or $0.09 per share, resulting from the sale of approximately
half of the Company's interest (7 million shares) in Alliance Data Systems
Corporation (NYSE: ADS) in a secondary offering.
Adjustments Related to the Sale of Lerner New York:
.. Adjustments to reflect the November 2002 sale of Lerner New York as if it
had happened at the beginning of 2002.
Adjustments Related to the Recombination of Intimate Brands, Inc. ("IBI")
.. Adjustments to exclude a first quarter 2002 non-cash, pretax special
charge of $33.8 million, or $0.05 per share, relating to the exchange of
vested IBI stock options and restricted stock for similar Limited Brands
stock awards.
.. Adjustments to eliminate minority interest expense and increase weighted
average shares outstanding to reflect the March 2002 recombination of
Intimate Brands, Inc. as if it had occurred at the beginning of 2002.
To hear the Company's live first quarter earnings conference call, log on to
www.LimitedBrands.com at 8:00 a.m. EDT on Monday May 19, 2003, or call
1-877-601-1433. To hear a replay of the earnings call, dial 1-800-337-6551,
followed by the ID code LTD (583). An audio replay of the conference call, as
well as additional financial information, will also be available at
www.LimitedBrands.com.
ABOUT LIMITED BRANDS:
Limited Brands, through Victoria's Secret, Bath & Body Works, Express, Express
Men's (Structure), Limited Stores, White Barn Candle Co. and Henri Bendel,
presently operates 4,011 specialty stores. Victoria's Secret products are also
available through the catalogue and www.VictoriasSecret.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: All forward-looking statements made by the Company in this press release
or the first quarter earnings call involve risks and uncertainties and are
subject to change based on various important factors, many of which may be
beyond the Company's control. Accordingly, the Company's 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" and similar expressions may identify
forward-looking statements. The following factors, among others, in some cases
have affected and in the future could affect the Company's financial performance
and actual results and could cause actual results for 2003 and beyond 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 management: changes in consumer spending patterns, consumer preferences
and overall economic conditions; the potential impact of national and
international security concerns on the retail environment, including any
possible military action, terrorist attacks or other hostilities; the impact of
competition and pricing; changes in weather patterns; political stability;
postal rate increases and charges; paper and printing costs; risks associated
with the seasonality of the retail industry; risks related to consumer
acceptance of the Company's products and the ability to develop new merchandise;
the ability to retain, hire and train key personnel; risks associated with the
possible inability of the Company's manufacturers to deliver products in a
timely manner; risks associated with relying on foreign sources of production,
including the impact in Asia and elsewhere of the recent outbreak of severe
acute respiratory syndrome; availability of suitable store locations on
appropriate terms; and other factors that may be described in the Company's
filings with the Securities and Exchange Commission. The forward-looking
information provided in this press release or the first quarter earnings call is
based on information available to the Company as of the date of this press
release. The Company does not undertake to publicly update or revise its
forward-looking statements even if experience or future changes make it clear
that any projected results expressed or implied therein will not be realized.
###
For further information, please contact:
Tom Katzenmeyer
Vice President, Communications and Investor Relations
Limited Brands
614-415-7076
www.LimitedBrands.com
(attachments: Consolidated Statements of Income and Reconciliation of Adjusted
Results, pages 3-4)
LIMITED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RECONCILIATION OF ADJUSTED RESULTS
THIRTEEN WEEKS ENDED MAY 3, 2003 AND MAY 4, 2002
(Unaudited)
(In thousands except per share amounts)
2003 2002
-------------------------------------- ---------------------------------------
Reported Adjustments Adjusted Reported Adjustments Adjusted
----------- ------------- ----------- ------------ ------------- ------------
Net Sales $1,842,297 - $1,842,297 $ 1,798,707 - $1,798,707
Gross Income 612,063 - 612,063 621,661 - 621,661
General, Administrative and
Store Operating Expenses (503,012) - (503,012) (493,518) - (493,518)
Special Item - - - (33,808) $ 33,808 -
---------- ----------- ---------- ----------- ----------- ----------
Operating Income 109,051 - 109,051 94,335 33,808 128,143
Interest Expense (26,970) - (26,970) (9,230) - (9,230)
Interest Income 9,234 - 9,234 7,562 1,875 9,437
Other Income (Loss) (8,471) - (8,471) (476) - (476)
Minority Interest - - - (6,063) 6,063 -
Gain on Investee's Stock 79,686 ($79,686) - - - -
---------- ----------- ---------- ----------- ----------- ----------
Income From Continuing Operations
Before Income Taxes 162,530 (79,686) 82,844 86,128 41,746 127,874
Income Tax Expense 65,000 (32,000) 33,000 42,000 9,000 51,000
---------- ----------- ---------- ----------- ----------- ----------
Net Income From Continuing Operations 97,530 (47,686) 49,844 44,128 32,746 76,874
Income From Discontinued Operations, Net of Tax - - - 5,730 (5,730) -
---------- ----------- ---------- ----------- ----------- ----------
Net Income $ 97,530 ($47,686) $ 49,844 $ 49,858 $ 27,016 $ 76,874
========== =========== ========== =========== =========== ==========
Income Per Share
Continuing Operations $ 0.19 $ 0.09 $ 0.09 $ 0.14
Discontinued Operations - - 0.01 -
---------- ---------- ----------- ----------
Net Income Per Share $ 0.19 $ 0.09 $ 0.10 $ 0.14
========== ========== =========== ==========
Weighted Average Shares Outstanding 527,032 527,032 487,125 534,397
========== ========== =========== ==========
See Attached Notes to Consolidated Statements of Income and Reconciliation of
Adjusted Results.
LIMITED BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED STATEMENTS OF INCOME AND
RECONCILIATION OF ADJUSTED RESULTS
The "Adjusted Results" provided in the attached unaudited Consolidated
Statements of Income are non-GAAP financial measures and reflect the following:
Fiscal 2003
For the first quarter of 2003, adjusted results exclude a $79.7 million pretax,
non-operating gain resulting from the sale of approximately one-half of the
Company's investment in Alliance Data Systems Corporation.
Fiscal 2002
In the first quarter of 2002, the Company completed a tender offer and merger
that resulted in the acquisition of the Intimate Brands, Inc. ("IBI") minority
interest. The adjusted results:
.. Eliminate the minority interest and increase total weighted average shares
outstanding to reflect the recombination as if it had occurred at the
beginning of 2002.
.. Eliminate a $33.8 million pretax, special non-cash charge relating to the
exchange of vested IBI stock options and restricted stock for similar
Limited Brands stock awards.
The adjusted results also exclude the results of Lerner New York ("Lerner")
which are classified as a discontinued operation in the reported results.
Adjusted results also reflect additional interest income from the $75 million
subordinated note received in connection with the sale of Lerner, which bears
interest at 10% per annum.
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.