Exhibit 99.1
LIMITED BRANDS REPORTS 2003 SECOND QUARTER EARNINGS
Columbus, Ohio, August 21, 2003 -- Limited Brands (NYSE: LTD) today reported
2003 second quarter results.
Earnings per share were $0.19 for the second quarter compared to $0.16 last
year. Operating income was $170.4 million compared to $138.7 million last year,
and net income was $102.0 million compared to $83.2 million last year.
Comparable store sales for the quarter ended August 2, 2003 increased 3% and net
sales of $2.014 billion increased 5% compared to sales of $1.912 billion last
year.
The Company also stated that August sales have been below plan at the apparel
group, and that overall comparable store sales are currently somewhat below its
expectation for a low single digit positive comp. However, the Company stated
that it is comfortable with the current First Call earnings estimates for the
third and fourth quarters of $0.04 and $0.74 per share, respectively, as it
plans to make up for the August shortfall in September and October, based on
activities in those months.
To hear the Company's live second quarter earnings conference call, log on to
www.LimitedBrands.com at 8:00 a.m. EDT on Thursday, August 21, 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, Limited Stores, White Barn Candle Co. and Henri Bendel, presently
operates 3,972 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 second 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 second 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;
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 second 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 3-5)
LIMITED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RECONCILIATION OF ADJUSTED RESULTS
THIRTEEN WEEKS ENDED AUGUST 2, 2003 AND AUGUST 3, 2002
(Unaudited)
(In thousands except per share amounts)
2002
----------------------------------------
2003 Reported Adjustments Adjusted
---------- ---------- ----------- ----------
Net Sales $2,014,106 $1,912,416 - $1,912,416
Gross Income 702,224 672,968 - 672,968
General, Administrative and
Store Operating Expenses (531,857) (534,295) - (534,295)
---------- ---------- ----------- ----------
Operating Income 170,367 138,673 - 138,673
Interest Expense (11,425) (6,155) - (6,155)
Interest Income 8,107 6,378 $ 1,875 8,253
Other Income (Loss) 910 (2,135) - (2,135)
---------- ---------- ----------- ----------
Income From Continuing Operations
Before Income Taxes 167,959 136,761 1,875 138,636
Provision for Income Taxes 66,000 55,000 - 55,000
---------- ---------- ----------- ----------
Net Income From Continuing Operations 101,959 81,761 1,875 83,636
Income From Discontinued Operations, Net of Tax - 1,486 (1,486) -
---------- ---------- ----------- ----------
Net Income $ 101,959 $ 83,247 $ 389 $ 83,636
========== ========== =========== ==========
Income Per Share
Continuing Operations $ 0.19 $ 0.15 $ 0.16
Discontinued Operations - - -
---------- ---------- ----------
Net Income Per Share $ 0.19 $ 0.16 $ 0.16
========== ========== ==========
Weighted Average Shares Outstanding 526,348 536,843 536,843
========== ========== ==========
See Attached Notes to Consolidated Statements of Income and Reconciliation of
Adjusted Results.
LIMITED BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RECONCILIATION OF ADJUSTED RESULTS
TWENTY-SIX WEEKS ENDED AUGUST 2, 2003 AND AUGUST 3, 2002
(Unaudited)
(In thousands except per share amounts)
2003 2002
----------------------------------------- --------------------------------------
Reported Adjustments Adjusted Reported Adjustments Adjusted
----------- ------------ ----------- ----------- ------------ -----------
Net Sales $ 3,856,403 - $ 3,856,403 $ 3,711,123 - $ 3,711,123
Gross Income 1,314,287 - 1,314,287 1,294,629 - 1,294,629
General, Administrative and
Store Operating Expenses (1,034,869) - (1,034,869) (1,027,813) - (1,027,813)
Special Item - - - (33,808) $ 33,808 -
----------- ----------- ----------- ----------- ----------- -----------
Operating Income 279,418 - 279,418 233,008 33,808 266,816
Interest Expense (38,395) - (38,395) (15,385) - (15,385)
Interest Income 17,341 - 17,341 13,940 3,750 17,690
Other Income (Loss) (7,561) - (7,561) (2,611) - (2,611)
Minority Interest - - - (6,063) 6,063 -
Gain on Investee's Stock 79,686 ($79,686) - - - -
----------- ----------- ----------- ----------- ----------- -----------
Income From Continuing Operations
Before Income Taxes 330,489 (79,686) 250,803 222,889 43,621 266,510
Provision for Income Taxes 131,000 (32,000) 99,000 97,000 9,000 106,000
----------- ----------- ----------- ----------- ----------- -----------
Net Income From Continuing Operations 199,489 (47,686) 151,803 125,889 34,621 160,510
Income From Discontinued Operations, Net of Tax - - - 7,216 (7,216) -
----------- ----------- ----------- ----------- ----------- -----------
Net Income $ 199,489 ($47,686) $ 151,803 $ 133,105 $ 27,405 $ 160,510
=========== =========== =========== =========== =========== ===========
Income Per Share
Continuing Operations $ 0.38 $ 0.29 $ 0.25 $ 0.30
Discontinued Operations - - 0.01 -
----------- ----------- ----------- -----------
Net Income Per Share $ 0.38 $ 0.29 $ 0.26 $ 0.30
=========== =========== =========== ===========
Weighted Average Shares Outstanding 526,690 526,690 511,984 535,620
=========== =========== =========== ===========
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.