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Share Name | Share Symbol | Market | Type |
---|---|---|---|
L Brands Inc | NYSE:LB | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 79.92 | 0 | 01:00:00 |
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
31-1029810
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer Identification No.)
|
Three Limited Parkway
|
|
|
Columbus,
|
Ohio
|
43230
|
(Address of principal executive offices)
|
(Zip Code)
|
|
(614)
|
415-7000
|
|
(Registrant's Telephone Number, Including Area Code)
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
|
|
|
|
Non-accelerated filer
|
☐ (Do not check if a smaller reporting company)
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.50 Par Value
|
LB
|
The New York Stock Exchange
|
|
|
Page No.
|
|
|
|
|
Item 1. Financial Statements *
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 4. Controls and Procedures
|
|
|
|
|
|
Item 1. Legal Proceedings
|
|
|
|
Item 1A. Risk Factors
|
|
|
|
|
|
Item 3. Defaults Upon Senior Securities
|
|
|
|
Item 4. Mine Safety Disclosures
|
|
|
|
Item 5. Other Information
|
|
|
|
Item 6. Exhibits
|
|
|
|
*
|
The Company's fiscal year ends on the Saturday nearest to January 31. As used herein, “second quarter of 2020” and “second quarter of 2019” refer to the thirteen-week periods ended August 1, 2020 and August 3, 2019, respectively. “Year-to-date 2020” and “year-to-date 2019” refer to the twenty-six-week periods ending August 1, 2020 and August 3, 2019, respectively.
|
Item 1.
|
FINANCIAL STATEMENTS
|
|
Second Quarter
|
|
Year-to-Date
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net Sales
|
$
|
2,319
|
|
|
$
|
2,902
|
|
|
$
|
3,974
|
|
|
$
|
5,530
|
|
Costs of Goods Sold, Buying and Occupancy
|
(1,608
|
)
|
|
(1,919
|
)
|
|
(2,974
|
)
|
|
(3,614
|
)
|
||||
Gross Profit
|
711
|
|
|
983
|
|
|
1,000
|
|
|
1,916
|
|
||||
General, Administrative and Store Operating Expenses
|
(667
|
)
|
|
(808
|
)
|
|
(1,274
|
)
|
|
(1,588
|
)
|
||||
Operating Income (Loss)
|
44
|
|
|
175
|
|
|
(274
|
)
|
|
328
|
|
||||
Interest Expense
|
(104
|
)
|
|
(95
|
)
|
|
(201
|
)
|
|
(194
|
)
|
||||
Other Income (Loss)
|
—
|
|
|
(38
|
)
|
|
3
|
|
|
(31
|
)
|
||||
Income (Loss) Before Income Taxes
|
(60
|
)
|
|
42
|
|
|
(472
|
)
|
|
103
|
|
||||
Provision (Benefit) for Income Taxes
|
(11
|
)
|
|
4
|
|
|
(126
|
)
|
|
25
|
|
||||
Net Income (Loss)
|
$
|
(49
|
)
|
|
$
|
38
|
|
|
$
|
(346
|
)
|
|
$
|
78
|
|
Net Income (Loss) Per Basic Share
|
$
|
(0.18
|
)
|
|
$
|
0.14
|
|
|
$
|
(1.25
|
)
|
|
$
|
0.28
|
|
Net Income (Loss) Per Dilutive Share
|
$
|
(0.18
|
)
|
|
$
|
0.14
|
|
|
$
|
(1.25
|
)
|
|
$
|
0.28
|
|
Dividends Per Share
|
$
|
—
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.60
|
|
|
Second Quarter
|
|
Year-to-Date
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net Income (Loss)
|
$
|
(49
|
)
|
|
$
|
38
|
|
|
$
|
(346
|
)
|
|
$
|
78
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Translation
|
2
|
|
|
(7
|
)
|
|
(4
|
)
|
|
(11
|
)
|
||||
Unrealized Gain (Loss) on Cash Flow Hedges
|
(3
|
)
|
|
2
|
|
|
2
|
|
|
4
|
|
||||
Reclassification of Cash Flow Hedges to Earnings
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||
Total Other Comprehensive Loss, Net of Tax
|
(2
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|
(10
|
)
|
||||
Total Comprehensive Income (Loss)
|
$
|
(51
|
)
|
|
$
|
32
|
|
|
$
|
(349
|
)
|
|
$
|
68
|
|
|
August 1,
2020 |
|
February 1,
2020 |
|
August 3,
2019 |
||||||
|
(Unaudited)
|
|
|
|
(Unaudited)
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current Assets:
|
|
|
|
|
|
||||||
Cash and Cash Equivalents
|
$
|
2,611
|
|
|
$
|
1,499
|
|
|
$
|
853
|
|
Accounts Receivable, Net
|
268
|
|
|
306
|
|
|
283
|
|
|||
Inventories
|
1,476
|
|
|
1,287
|
|
|
1,329
|
|
|||
Other
|
150
|
|
|
153
|
|
|
188
|
|
|||
Total Current Assets
|
4,505
|
|
|
3,245
|
|
|
2,653
|
|
|||
Property and Equipment, Net
|
2,292
|
|
|
2,486
|
|
|
2,756
|
|
|||
Operating Lease Assets
|
2,635
|
|
|
3,053
|
|
|
3,209
|
|
|||
Goodwill
|
628
|
|
|
628
|
|
|
1,348
|
|
|||
Trade Names
|
411
|
|
|
411
|
|
|
411
|
|
|||
Deferred Income Taxes
|
74
|
|
|
84
|
|
|
62
|
|
|||
Other Assets
|
335
|
|
|
218
|
|
|
179
|
|
|||
Total Assets
|
$
|
10,880
|
|
|
$
|
10,125
|
|
|
$
|
10,618
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
||||||
Current Liabilities:
|
|
|
|
|
|
||||||
Accounts Payable
|
$
|
957
|
|
|
$
|
647
|
|
|
$
|
763
|
|
Accrued Expenses and Other
|
1,340
|
|
|
1,052
|
|
|
919
|
|
|||
Current Debt
|
460
|
|
|
61
|
|
|
75
|
|
|||
Current Operating Lease Liabilities
|
624
|
|
|
478
|
|
|
456
|
|
|||
Income Taxes
|
52
|
|
|
134
|
|
|
3
|
|
|||
Total Current Liabilities
|
3,433
|
|
|
2,372
|
|
|
2,216
|
|
|||
Deferred Income Taxes
|
191
|
|
|
219
|
|
|
241
|
|
|||
Long-term Debt
|
6,269
|
|
|
5,487
|
|
|
5,475
|
|
|||
Long-term Operating Lease Liabilities
|
2,698
|
|
|
3,052
|
|
|
3,165
|
|
|||
Other Long-term Liabilities
|
193
|
|
|
490
|
|
|
450
|
|
|||
Shareholders’ Equity (Deficit):
|
|
|
|
|
|
||||||
Preferred Stock - $1.00 par value; 10 shares authorized; none issued
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common Stock - $0.50 par value; 1,000 shares authorized; 286, 285 and 284 shares issued; 278, 277 and 276 shares outstanding, respectively
|
143
|
|
|
142
|
|
|
142
|
|
|||
Paid-in Capital
|
869
|
|
|
847
|
|
|
806
|
|
|||
Accumulated Other Comprehensive Income
|
49
|
|
|
52
|
|
|
49
|
|
|||
Retained Earnings (Deficit)
|
(2,611
|
)
|
|
(2,182
|
)
|
|
(1,572
|
)
|
|||
Less: Treasury Stock, at Average Cost; 8, 8 and 8 shares, respectively
|
(358
|
)
|
|
(358
|
)
|
|
(358
|
)
|
|||
Total L Brands, Inc. Shareholders’ Equity (Deficit)
|
(1,908
|
)
|
|
(1,499
|
)
|
|
(933
|
)
|
|||
Noncontrolling Interest
|
4
|
|
|
4
|
|
|
4
|
|
|||
Total Equity (Accumulated Deficit)
|
(1,904
|
)
|
|
(1,495
|
)
|
|
(929
|
)
|
|||
Total Liabilities and Equity (Deficit)
|
$
|
10,880
|
|
|
$
|
10,125
|
|
|
$
|
10,618
|
|
|
Common Stock
|
|
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings (Accumulated Deficit)
|
|
Treasury
Stock, at
Average
Cost
|
|
Noncontrolling Interest
|
|
Total Equity (Deficit)
|
|||||||||||||||||
Shares
Outstanding
|
|
Par
Value
|
||||||||||||||||||||||||||||
Balance, May 2, 2020
|
278
|
|
|
$
|
143
|
|
|
$
|
865
|
|
|
$
|
51
|
|
|
$
|
(2,562
|
)
|
|
$
|
(358
|
)
|
|
$
|
3
|
|
|
$
|
(1,858
|
)
|
Net Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|||||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Total Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|||||||
Share-based Compensation and Other
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|||||||
Balance, August 1, 2020
|
278
|
|
|
$
|
143
|
|
|
$
|
869
|
|
|
$
|
49
|
|
|
$
|
(2,611
|
)
|
|
$
|
(358
|
)
|
|
$
|
4
|
|
|
$
|
(1,904
|
)
|
|
Common Stock
|
|
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings (Accumulated Deficit)
|
|
Treasury
Stock, at
Average
Cost
|
|
Noncontrolling Interest
|
|
Total Equity (Deficit)
|
|||||||||||||||||
Shares
Outstanding
|
|
Par
Value
|
||||||||||||||||||||||||||||
Balance, May 4, 2019
|
276
|
|
|
$
|
142
|
|
|
$
|
786
|
|
|
$
|
55
|
|
|
$
|
(1,527
|
)
|
|
$
|
(358
|
)
|
|
$
|
4
|
|
|
$
|
(898
|
)
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||||
Total Comprehensive Income (Loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
38
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||||
Cash Dividends ($0.30 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|||||||
Share-based Compensation and Other
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||||
Balance, August 3, 2019
|
276
|
|
|
$
|
142
|
|
|
$
|
806
|
|
|
$
|
49
|
|
|
$
|
(1,572
|
)
|
|
$
|
(358
|
)
|
|
$
|
4
|
|
|
$
|
(929
|
)
|
|
Common Stock
|
|
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings (Accumulated Deficit)
|
|
Treasury
Stock, at
Average
Cost
|
|
Noncontrolling Interest
|
|
Total Equity (Deficit)
|
|||||||||||||||||
Shares
Outstanding
|
|
Par
Value
|
||||||||||||||||||||||||||||
Balance, February 1, 2020
|
277
|
|
|
$
|
142
|
|
|
$
|
847
|
|
|
$
|
52
|
|
|
$
|
(2,182
|
)
|
|
$
|
(358
|
)
|
|
$
|
4
|
|
|
$
|
(1,495
|
)
|
Net Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(346
|
)
|
|
—
|
|
|
—
|
|
|
(346
|
)
|
|||||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||||
Total Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(346
|
)
|
|
—
|
|
|
—
|
|
|
(349
|
)
|
|||||||
Cash Dividends ($0.30 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|||||||
Share-based Compensation and Other
|
1
|
|
|
1
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||||
Balance, August 1, 2020
|
278
|
|
|
$
|
143
|
|
|
$
|
869
|
|
|
$
|
49
|
|
|
$
|
(2,611
|
)
|
|
$
|
(358
|
)
|
|
$
|
4
|
|
|
$
|
(1,904
|
)
|
|
Common Stock
|
|
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings (Accumulated Deficit)
|
|
Treasury
Stock, at
Average
Cost
|
|
Noncontrolling Interest
|
|
Total Equity (Deficit)
|
|||||||||||||||||
Shares
Outstanding
|
|
Par
Value
|
||||||||||||||||||||||||||||
Balance, February 2, 2019
|
275
|
|
|
$
|
141
|
|
|
$
|
771
|
|
|
$
|
59
|
|
|
$
|
(1,482
|
)
|
|
$
|
(358
|
)
|
|
$
|
4
|
|
|
$
|
(865
|
)
|
Cumulative Effect of Accounting Change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Balance, February 3, 2019
|
275
|
|
|
141
|
|
|
771
|
|
|
59
|
|
|
(1,484
|
)
|
|
(358
|
)
|
|
4
|
|
|
(867
|
)
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|||||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||||
Total Comprehensive Income (Loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
78
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|||||||
Cash Dividends ($0.60 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|||||||
Share-based Compensation and Other
|
1
|
|
|
1
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||||
Balance, August 3, 2019
|
276
|
|
|
$
|
142
|
|
|
$
|
806
|
|
|
$
|
49
|
|
|
$
|
(1,572
|
)
|
|
$
|
(358
|
)
|
|
$
|
4
|
|
|
$
|
(929
|
)
|
|
Year-to-Date
|
||||||
|
2020
|
|
2019
|
||||
Operating Activities:
|
|
|
|
||||
Net Income (Loss)
|
$
|
(346
|
)
|
|
$
|
78
|
|
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:
|
|
|
|
||||
Depreciation of Long-lived Assets
|
266
|
|
|
295
|
|
||
Long-lived Store and Lease Asset Impairment Charges
|
214
|
|
|
—
|
|
||
Share-based Compensation Expense
|
28
|
|
|
44
|
|
||
Deferred Income Taxes
|
(19
|
)
|
|
15
|
|
||
Gain from Hong Kong Store Closure and Lease Termination
|
(39
|
)
|
|
—
|
|
||
Loss on Extinguishment of Debt
|
—
|
|
|
40
|
|
||
Gains on Distributions from Easton Investments
|
—
|
|
|
(2
|
)
|
||
Changes in Assets and Liabilities:
|
|
|
|
||||
Accounts Receivable
|
37
|
|
|
55
|
|
||
Inventories
|
(191
|
)
|
|
(83
|
)
|
||
Accounts Payable, Accrued Expenses and Other
|
304
|
|
|
(107
|
)
|
||
Income Taxes Payable
|
(92
|
)
|
|
(138
|
)
|
||
Other Assets and Liabilities
|
124
|
|
|
(35
|
)
|
||
Net Cash Provided by Operating Activities
|
286
|
|
|
162
|
|
||
Investing Activities:
|
|
|
|
||||
Capital Expenditures
|
(124
|
)
|
|
(244
|
)
|
||
Other Investing Activities
|
8
|
|
|
7
|
|
||
Net Cash Used for Investing Activities
|
(116
|
)
|
|
(237
|
)
|
||
Financing Activities:
|
|
|
|
||||
Proceeds from Issuance of Long-Term Debt, Net of Issuance Costs
|
1,231
|
|
|
486
|
|
||
Payments of Long-term Debt
|
—
|
|
|
(799
|
)
|
||
Borrowing from Credit Agreement
|
950
|
|
|
—
|
|
||
Repayment of Credit Agreement
|
(950
|
)
|
|
—
|
|
||
Borrowings from Foreign Facilities
|
33
|
|
|
25
|
|
||
Repayments of Foreign Facilities
|
(85
|
)
|
|
(14
|
)
|
||
Dividends Paid
|
(83
|
)
|
|
(166
|
)
|
||
Tax Payments related to Share-based Awards
|
(6
|
)
|
|
(11
|
)
|
||
Other Financing Activities
|
(19
|
)
|
|
(4
|
)
|
||
Net Cash Provided by (Used for) Financing Activities
|
1,071
|
|
|
(483
|
)
|
||
Effects of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash
|
(1
|
)
|
|
(2
|
)
|
||
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash
|
1,240
|
|
|
(560
|
)
|
||
Cash and Cash Equivalents and Restricted Cash, Beginning of Period
|
1,499
|
|
|
1,413
|
|
||
Cash and Cash Equivalents and Restricted Cash, End of Period
|
$
|
2,739
|
|
|
$
|
853
|
|
•
|
Bath & Body Works
|
•
|
Victoria’s Secret
|
•
|
PINK
|
•
|
Furloughing most store associates as of April 5 during their temporary store closure, while continuing to provide healthcare benefits for eligible associates;
|
•
|
Suspending associate merit increases;
|
•
|
Temporarily reducing salaries for senior vice presidents and above by 20%;
|
•
|
Temporarily suspending cash compensation for all members of the Board of Directors;
|
•
|
Reducing 2020 forecasted capital expenditures from $550 million to approximately $250 million;
|
•
|
Reducing Spring (first and second quarter) inventory receipts versus last year by approximately 45% at Victoria's Secret and PINK, and by approximately 20% at Bath & Body Works;
|
•
|
Suspending the quarterly cash dividend beginning in the second quarter of fiscal 2020;
|
•
|
Suspending most store and select office rent payments during the temporary closures. The Company is in active discussions with its landlords to negotiate with respect to these rent payments and go-forward occupancy costs;
|
•
|
Converting the revolving credit facility to an asset-backed loan facility and issuing $1.25 billion in new notes; and
|
•
|
Extending payment terms to vendors.
|
|
Second Quarter
|
|
Year-to-Date
|
||||||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
|
(in millions)
|
||||||||||||||
Bath & Body Works Stores (a)
|
$
|
678
|
|
|
$
|
883
|
|
|
$
|
1,102
|
|
|
$
|
1,597
|
|
Bath & Body Works Direct
|
519
|
|
|
178
|
|
|
807
|
|
|
335
|
|
||||
Total Bath & Body Works
|
1,197
|
|
|
1,061
|
|
|
1,909
|
|
|
1,932
|
|
||||
Victoria’s Secret Stores (a)
|
364
|
|
|
1,233
|
|
|
877
|
|
|
2,381
|
|
||||
Victoria’s Secret Direct
|
614
|
|
|
373
|
|
|
922
|
|
|
735
|
|
||||
Total Victoria’s Secret
|
978
|
|
|
1,606
|
|
|
1,799
|
|
|
3,116
|
|
||||
Victoria's Secret and Bath & Body Works International (b)
|
80
|
|
|
155
|
|
|
146
|
|
|
289
|
|
||||
Other (c)
|
64
|
|
|
80
|
|
|
120
|
|
|
193
|
|
||||
Total Net Sales
|
$
|
2,319
|
|
|
$
|
2,902
|
|
|
$
|
3,974
|
|
|
$
|
5,530
|
|
(a)
|
Includes company-owned stores in the U.S. and Canada.
|
(b)
|
Includes company-owned stores in the U.K., Ireland and Greater China, direct sales in Greater China and wholesale sales, royalties and other fees associated with non-company owned stores.
|
(c)
|
Includes wholesale revenues from the Company's sourcing function.
|
|
Second Quarter
|
|
Year-to-Date
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
|
(in millions)
|
||||||||||
Weighted-average Common Shares:
|
|
|
|
|
|
|
|
||||
Issued Shares
|
286
|
|
|
284
|
|
|
285
|
|
|
284
|
|
Treasury Shares
|
(8
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|
(8
|
)
|
Basic Shares
|
278
|
|
|
276
|
|
|
277
|
|
|
276
|
|
Effect of Dilutive Options and Restricted Stock (a)
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Diluted Shares
|
278
|
|
|
278
|
|
|
277
|
|
|
278
|
|
Anti-dilutive Options and Awards (a)
|
11
|
|
|
6
|
|
|
12
|
|
|
5
|
|
(a)
|
These options and awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For 2020, the dilutive impact of outstanding options and awards were excluded from dilutive shares as a result of the Company's net loss for the periods.
|
|
|
Ordinary Dividends
|
|
Total Paid
|
||||
|
|
(per share)
|
|
(in millions)
|
||||
2020
|
|
|
|
|
||||
Second Quarter
|
|
$
|
—
|
|
|
$
|
—
|
|
First Quarter
|
|
0.30
|
|
|
83
|
|
||
Total
|
|
$
|
0.30
|
|
|
$
|
83
|
|
2019
|
|
|
|
|
||||
Second Quarter
|
|
$
|
0.30
|
|
|
$
|
83
|
|
First Quarter
|
|
0.30
|
|
|
83
|
|
||
Total
|
|
$
|
0.60
|
|
|
$
|
166
|
|
|
August 1,
2020 |
|
February 1,
2020 |
|
August 3,
2019 |
||||||
|
(in millions)
|
||||||||||
Finished Goods Merchandise
|
$
|
1,259
|
|
|
$
|
1,152
|
|
|
$
|
1,132
|
|
Raw Materials and Merchandise Components
|
217
|
|
|
135
|
|
|
197
|
|
|||
Total Inventories
|
$
|
1,476
|
|
|
$
|
1,287
|
|
|
$
|
1,329
|
|
|
August 1,
2020 |
|
February 1,
2020 |
|
August 3,
2019 |
||||||
|
(in millions)
|
||||||||||
Property and Equipment, at Cost
|
$
|
6,276
|
|
|
$
|
6,613
|
|
|
$
|
6,808
|
|
Accumulated Depreciation and Amortization
|
(3,984
|
)
|
|
(4,127
|
)
|
|
(4,052
|
)
|
|||
Property and Equipment, Net
|
$
|
2,292
|
|
|
$
|
2,486
|
|
|
$
|
2,756
|
|
|
Second Quarter
|
|
Year-to-Date
|
||||||||||||||||||||
|
Store Asset
Impairment
|
|
Operating Lease Asset Impairment
|
|
Total
Impairment
|
|
Store Asset
Impairment
|
|
Operating Lease Asset Impairment
|
|
Total
Impairment
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Victoria's Secret (a)
|
$
|
14
|
|
|
$
|
61
|
|
|
$
|
75
|
|
|
$
|
111
|
|
|
$
|
61
|
|
|
$
|
172
|
|
Victoria's Secret and Bath & Body Works International (b)
|
—
|
|
|
42
|
|
|
42
|
|
|
—
|
|
|
42
|
|
|
42
|
|
||||||
Total
|
$
|
14
|
|
|
$
|
103
|
|
|
$
|
117
|
|
|
$
|
111
|
|
|
$
|
103
|
|
|
$
|
214
|
|
(a)
|
Includes stores in the U.S. and Canada.
|
(b)
|
Includes stores in the U.K., Ireland and Greater China.
|
|
August 1,
2020 |
|
February 1,
2020 |
|
August 3,
2019 |
||||||
|
(in millions)
|
||||||||||
Senior Secured Debt with Subsidiary Guarantee
|
|
|
|
|
|
||||||
$750 million, 6.875% Fixed Interest Rate Secured Notes due July 2025 ("2025 Secured Notes")
|
$
|
739
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured Foreign Facilities
|
101
|
|
|
103
|
|
|
95
|
|
|||
Total Senior Secured Debt with Subsidiary Guarantee
|
$
|
840
|
|
|
$
|
103
|
|
|
$
|
95
|
|
Senior Debt with Subsidiary Guarantee
|
|
|
|
|
|
||||||
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)
|
$
|
991
|
|
|
$
|
991
|
|
|
$
|
990
|
|
$860 million, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)
|
858
|
|
|
858
|
|
|
857
|
|
|||
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)
|
693
|
|
|
693
|
|
|
693
|
|
|||
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)
|
498
|
|
|
498
|
|
|
498
|
|
|||
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)
|
496
|
|
|
496
|
|
|
496
|
|
|||
$500 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")
|
492
|
|
|
—
|
|
|
—
|
|
|||
$500 million, 7.50% Fixed Interest Rate Notes due June 2029 ("2029 Notes")
|
488
|
|
|
487
|
|
|
486
|
|
|||
$450 million, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)
|
450
|
|
|
450
|
|
|
449
|
|
|||
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)
|
277
|
|
|
276
|
|
|
274
|
|
|||
Total Senior Debt with Subsidiary Guarantee
|
$
|
5,243
|
|
|
$
|
4,749
|
|
|
$
|
4,743
|
|
Senior Debt
|
|
|
|
|
|
||||||
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)
|
$
|
348
|
|
|
$
|
348
|
|
|
$
|
348
|
|
$300 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)
|
298
|
|
|
298
|
|
|
297
|
|
|||
Unsecured Foreign Facilities
|
—
|
|
|
50
|
|
|
67
|
|
|||
Total Senior Debt
|
$
|
646
|
|
|
$
|
696
|
|
|
$
|
712
|
|
Total
|
$
|
6,729
|
|
|
$
|
5,548
|
|
|
$
|
5,550
|
|
Current Debt
|
(460
|
)
|
|
(61
|
)
|
|
(75
|
)
|
|||
Total Long-term Debt, Net of Current Portion
|
$
|
6,269
|
|
|
$
|
5,487
|
|
|
$
|
5,475
|
|
|
August 1,
2020 |
|
February 1,
2020 |
|
August 3,
2019 |
||||||
|
(in millions)
|
||||||||||
Principal Value
|
$
|
6,708
|
|
|
$
|
5,458
|
|
|
$
|
5,458
|
|
Fair Value, Estimated (a)
|
6,692
|
|
|
5,555
|
|
|
5,215
|
|
(a)
|
The estimated fair value of the Company’s publicly traded debt is based on reported transaction prices, which are considered Level 2 inputs in accordance with ASC 820, Fair Value Measurement. The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
|
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Accumulated Other Comprehensive Income
|
||||||
|
(in millions)
|
||||||||||
Balance as of February 1, 2020
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
52
|
|
Other Comprehensive Income (Loss) Before Reclassifications
|
(4
|
)
|
|
2
|
|
|
(2
|
)
|
|||
Amounts Reclassified from Accumulated Other Comprehensive Income
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Tax Effect
|
—
|
|
|
—
|
|
|
—
|
|
|||
Current-period Other Comprehensive Income (Loss)
|
(4
|
)
|
|
1
|
|
|
(3
|
)
|
|||
Balance as of August 1, 2020
|
$
|
48
|
|
|
$
|
1
|
|
|
$
|
49
|
|
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Accumulated Other Comprehensive Income
|
||||||
|
(in millions)
|
||||||||||
Balance as of February 2, 2019
|
$
|
57
|
|
|
$
|
2
|
|
|
$
|
59
|
|
Other Comprehensive Income (Loss) Before Reclassifications
|
(11
|
)
|
|
4
|
|
|
(7
|
)
|
|||
Amounts Reclassified from Accumulated Other Comprehensive Income
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||
Tax Effect
|
—
|
|
|
—
|
|
|
—
|
|
|||
Current-period Other Comprehensive Income (Loss)
|
(11
|
)
|
|
1
|
|
|
(10
|
)
|
|||
Balance as of August 3, 2019
|
$
|
46
|
|
|
$
|
3
|
|
|
$
|
49
|
|
•
|
Victoria's Secret International, comprised of company-owned stores in the U.K., Ireland and Greater China, as well as stores operated by partners under franchise and license arrangements;
|
•
|
Victoria's Secret Beauty and Accessories, comprised of company-owned stores in Greater China, as well as stores operated by partners under franchise, license and wholesale arrangements, which feature Victoria's Secret branded beauty and accessories products in travel retail and other locations; and
|
•
|
Bath & Body Works International, comprised of stores operated by partners under franchise, license and wholesale arrangements.
|
|
Bath & Body
Works
|
|
Victoria’s
Secret
|
|
Victoria’s Secret
and
Bath &
Body Works
International
|
|
Other
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
2020
|
|
|
|
|
|
|
|
|
|
||||||||||
Second Quarter:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,197
|
|
|
$
|
978
|
|
|
$
|
80
|
|
|
$
|
64
|
|
|
$
|
2,319
|
|
Operating Income (Loss) (a)
|
326
|
|
|
(140
|
)
|
|
(19
|
)
|
|
(123
|
)
|
|
44
|
|
|||||
Year-to-Date:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,909
|
|
|
$
|
1,799
|
|
|
$
|
146
|
|
|
$
|
120
|
|
|
$
|
3,974
|
|
Operating Income (Loss) (a)
|
395
|
|
|
(440
|
)
|
|
(54
|
)
|
|
(175
|
)
|
|
(274
|
)
|
|||||
2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Second Quarter:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,061
|
|
|
$
|
1,606
|
|
|
$
|
155
|
|
|
$
|
80
|
|
|
$
|
2,902
|
|
Operating Income (Loss)
|
180
|
|
|
17
|
|
|
(1
|
)
|
|
(21
|
)
|
|
175
|
|
|||||
Year-to-Date:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Sales
|
$
|
1,932
|
|
|
$
|
3,116
|
|
|
$
|
289
|
|
|
$
|
193
|
|
|
$
|
5,530
|
|
Operating Income (Loss)
|
335
|
|
|
49
|
|
|
(5
|
)
|
|
(51
|
)
|
|
328
|
|
(a)
|
Victoria's Secret includes store and lease asset impairment charges of $75 million and $172 million for the second quarter and year-to-date 2020, respectively. Victoria's Secret and Bath & Body Works International includes lease asset impairment charges of $42 million. Additionally, Victoria's Secret and Bath & Body Works International includes a $36 million net gain related to the closure and lease termination of the Hong Kong flagship store. For additional information, see Note 7, “Long-Lived Assets." Bath & Body Works, Victoria's Secret and Other includes severance and related charges of $5 million, $26 million and $50 million, respectively. For additional information, see Note 4, “Restructuring."
|
•
|
general economic conditions, consumer confidence, consumer spending patterns and market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises or other major events, or the prospect of these events;
|
•
|
divestitures or other dispositions, including any divestiture of Victoria’s Secret and related operations, could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial statements;
|
•
|
the seasonality of our business;
|
•
|
difficulties arising from turnover in company leadership or other key positions;
|
•
|
our ability to attract, develop and retain qualified associates and manage labor-related costs;
|
•
|
liabilities arising from divested businesses;
|
•
|
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, environmental hazards or natural disasters;
|
•
|
significant health hazards or pandemics, which could result in closed factories, closed stores, reduced workforces, scarcity of raw materials, and scrutiny or embargoing of goods produced in infected areas;
|
•
|
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;
|
•
|
shareholder activism matters;
|
•
|
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 laws and regulations or other obligations related to data privacy and security;
|
•
|
our ability to comply with regulatory requirements;
|
•
|
legal and compliance matters; and
|
•
|
tax, trade and other regulatory matters.
|
Item 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Completed our comprehensive review of our home office organizations in order to achieve meaningful reductions in overhead expenses and decentralize significant shared functions and services to support the creation of standalone companies. This resulted in a reduction of our home office headcount by approximately 15%, or about 850 associates;
|
•
|
Managed inventories with discipline, including working with suppliers to identify opportunities to reduce merchandise costs in order to increase merchandise margin rates at Victoria’s Secret. As a result of this effort already underway, Spring inventory receipts for Victoria’s Secret were down approximately 45% compared to last year, and Fall receipts are expected to be down approximately 50% compared to last year;
|
•
|
Began taking action to reduce Victoria’s Secret store selling costs through changes in the management structure and labor model;
|
•
|
Continued to execute our previously announced plan to close approximately 250 Victoria’s Secret stores in 2020 while also negotiating with landlords for ongoing rent relief;
|
•
|
Worked to reduce operating losses in the Victoria's Secret U.K. business. We entered into "Light Administration" in June to restructure store lease agreements and explore the sale of the business to a joint venture or franchise partner.
|
•
|
We closed our unprofitable Victoria's Secret flagship store in Hong Kong and in China are restructuring lease terms on other unprofitable stores and have implemented a significant overhead expense reduction plan; and,
|
•
|
Subsequent to the end of the quarter, we retained financial advisors on the separation of Bath & Body Works and Victoria’s Secret.
|
•
|
Furloughing most store associates as of April 5 during their temporary store closure, while continuing to provide healthcare benefits for eligible associates;
|
•
|
Suspending associate merit increases;
|
•
|
Temporarily reducing salaries for senior vice presidents and above by 20%;
|
•
|
Temporarily suspending cash compensation for all members of the Board of Directors;
|
•
|
Reducing 2020 forecasted capital expenditures from $550 million to approximately $250 million;
|
•
|
Reducing Spring (first and second quarter) inventory receipts versus last year by approximately 45% at Victoria's Secret and PINK, and by approximately 20% at Bath & Body Works;
|
•
|
Suspending the quarterly cash dividend beginning in the second quarter of fiscal 2020;
|
•
|
Suspending most store and select office rent payments during the temporary closures. We are in active discussions with our landlords to negotiate with respect to these rent payments and go-forward occupancy costs;
|
•
|
Converting the revolving credit facility to an asset-backed loan facility and issuing $1.25 billion in new notes; and
|
•
|
Extending payment terms to vendors.
|
|
Second Quarter
|
|
Year-to-Date
|
||||||||||||
(in millions, except per share amounts)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Detail of Special Items - Income (Expense)
|
|
|
|
|
|
|
|
||||||||
Victoria's Secret Store and Lease Asset Impairment (a)
|
$
|
(117
|
)
|
|
$
|
—
|
|
|
$
|
(214
|
)
|
|
$
|
—
|
|
Restructuring Charges (b)
|
(81
|
)
|
|
—
|
|
|
(81
|
)
|
|
—
|
|
||||
Hong Kong Store Closure and Lease Termination (c)
|
36
|
|
|
—
|
|
|
36
|
|
|
—
|
|
||||
Special Items included in Operating Income (Loss)
|
(162
|
)
|
|
—
|
|
|
(258
|
)
|
|
—
|
|
||||
Loss on Extinguishment of Debt (d)
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||
Special Items included in Other Income (Loss)
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||
Tax Benefit from the Resolution of Certain Tax Matters and Changes in Tax Legislation (e)
|
21
|
|
|
—
|
|
|
71
|
|
|
—
|
|
||||
Tax Effect of Special Items included in Operating Income (Loss) and Other Income (Loss)
|
22
|
|
|
10
|
|
|
47
|
|
|
10
|
|
||||
Special Items included in Net Income (Loss)
|
$
|
(119
|
)
|
|
$
|
(30
|
)
|
|
$
|
(140
|
)
|
|
$
|
(30
|
)
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Reported Operating Income (Loss) to Adjusted Operating Income (Loss)
|
|||||||||||||||
Reported Operating Income (Loss)
|
$
|
44
|
|
|
$
|
175
|
|
|
$
|
(274
|
)
|
|
$
|
328
|
|
Special Items included in Operating Income (Loss)
|
162
|
|
|
—
|
|
|
258
|
|
|
—
|
|
||||
Adjusted Operating Income (Loss)
|
$
|
206
|
|
|
$
|
175
|
|
|
$
|
(15
|
)
|
|
$
|
328
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Reported Net Income (Loss) to Adjusted Net Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Reported Net Income (Loss)
|
$
|
(49
|
)
|
|
$
|
38
|
|
|
$
|
(346
|
)
|
|
$
|
78
|
|
Special Items included in Net Income (Loss)
|
119
|
|
|
30
|
|
|
140
|
|
|
30
|
|
||||
Adjusted Net Income (Loss)
|
$
|
69
|
|
|
$
|
68
|
|
|
$
|
(206
|
)
|
|
$
|
108
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Reported Earnings (Loss) Per Diluted Share to Adjusted Earnings (Loss) Per Diluted Share
|
|||||||||||||||
Reported Earnings (Loss) Per Diluted Share
|
$
|
(0.18
|
)
|
|
$
|
0.14
|
|
|
$
|
(1.25
|
)
|
|
$
|
0.28
|
|
Special Items included in Earnings (Loss) Per Diluted Share
|
0.42
|
|
|
0.11
|
|
|
0.50
|
|
|
0.11
|
|
||||
Adjusted Earnings (Loss) Per Diluted Share
|
$
|
0.25
|
|
|
$
|
0.24
|
|
|
$
|
(0.74
|
)
|
|
$
|
0.39
|
|
(a)
|
We recognized pre-tax impairment charges of $117 million ($99 million after tax) and $97 million ($72 million after tax) related to certain Victoria's Secret store and lease assets in the second and first quarter of 2020, respectively. For additional information see Note 7, "Long-Lived Assets" included in Item 1. Financial Statements.
|
(b)
|
In the second quarter of 2020, we recognized pre-tax severance charges of $81 million ($65 million after tax) related to headcount reductions as a result of restructuring activities. For additional information, see Note 4, “Restructuring" included in Item 1. Financial Statements.
|
(c)
|
In the second quarter of 2020, we recognized a net pre-tax gain of $36 million ($25 million after tax) related to the closure and termination of our lease for the Victoria’s Secret Hong Kong flagship store. For additional information, see Note 7, "Long-Lived Assets" included in Item 1. Financial Statements.
|
(d)
|
In the second quarter of 2019, we redeemed $764 million of outstanding notes maturing between 2020 and 2022, resulting in a pre-tax loss on extinguishment of $40 million (after-tax loss of $30 million). For additional information see Note 10, "Long-term Debt and Borrowing Facilities" included in Item 1. Financial Statements.
|
(e)
|
In the second quarter of 2020, we recognized a $21 million income tax benefit related to recent changes in tax legislation included in the CARES Act. In the first quarter of 2020, we recognized a $50 million tax benefit related to the resolution of certain tax matters. For additional information see Note 9, "Income Taxes" included in Item 1. Financial Statements.
|
|
Second Quarter
|
|
Year-to-Date
|
||||||||||||||||||
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Sales per Average Selling Square Foot (a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bath & Body Works U.S.
|
$
|
148
|
|
|
$
|
196
|
|
|
(24
|
%)
|
|
$
|
240
|
|
|
$
|
356
|
|
|
(33
|
%)
|
Victoria’s Secret U.S.
|
54
|
|
|
166
|
|
|
(67
|
%)
|
|
129
|
|
|
317
|
|
|
(59
|
%)
|
||||
Sales per Average Store (in thousands) (a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bath & Body Works U.S.
|
$
|
389
|
|
|
$
|
510
|
|
|
(24
|
%)
|
|
$
|
634
|
|
|
$
|
925
|
|
|
(32
|
%)
|
Victoria’s Secret U.S.
|
364
|
|
|
1,083
|
|
|
(66
|
%)
|
|
867
|
|
|
2,066
|
|
|
(58
|
%)
|
||||
Average Store Size (selling square feet)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bath & Body Works U.S.
|
2,638
|
|
|
2,606
|
|
|
1
|
%
|
|
|
|
|
|
|
|||||||
Victoria’s Secret U.S.
|
6,937
|
|
|
6,543
|
|
|
6
|
%
|
|
|
|
|
|
|
|||||||
Total Selling Square Feet (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bath & Body Works U.S.
|
4,308
|
|
|
4,253
|
|
|
1
|
%
|
|
|
|
|
|
|
|||||||
Victoria’s Secret U.S.
|
5,952
|
|
|
6,961
|
|
|
(14
|
%)
|
|
|
|
|
|
|
(a)
|
Sales per average selling square foot and sales per average store, which are indicators of store productivity, are calculated based on store sales for the period divided by the average, including the beginning and end of period, of total square footage and store count, respectively. As a result of the COVID-19 pandemic, all our stores in the U.S. were closed on March 17, and almost all remained closed as of the beginning of the second quarter. As of August 1, 2020 we have reopened the majority of our U.S. stores for both businesses. As a result, comparisons of year-over-year trends are not a meaningful way to discuss our operating results this quarter.
|
|
Stores at
|
|
|
|
|
|
Stores at
|
||||
|
February 1, 2020
|
|
Opened
|
|
Closed
|
|
August 1, 2020
|
||||
Bath & Body Works U.S.
|
1,637
|
|
|
10
|
|
|
(14
|
)
|
|
1,633
|
|
Bath & Body Works Canada
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
Total Bath & Body Works
|
1,739
|
|
|
10
|
|
|
(14
|
)
|
|
1,735
|
|
Victoria’s Secret U.S.
|
1,053
|
|
|
3
|
|
|
(198
|
)
|
|
858
|
|
Victoria’s Secret Canada
|
38
|
|
|
—
|
|
|
(12
|
)
|
|
26
|
|
Total Victoria's Secret
|
1,091
|
|
|
3
|
|
|
(210
|
)
|
|
884
|
|
Victoria's Secret U.K. / Ireland
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
Victoria's Secret Beauty and Accessories
|
41
|
|
|
1
|
|
|
(3
|
)
|
|
39
|
|
Victoria's Secret Greater China
|
23
|
|
|
3
|
|
|
(1
|
)
|
|
25
|
|
Total Victoria's Secret and Bath & Body Works International
|
90
|
|
|
4
|
|
|
(4
|
)
|
|
90
|
|
Total L Brands Stores
|
2,920
|
|
|
17
|
|
|
(228
|
)
|
|
2,709
|
|
|
Stores at
|
|
|
|
|
|
Stores at
|
||||
|
February 2, 2019
|
|
Opened
|
|
Closed
|
|
August 3, 2019
|
||||
Bath & Body Works U.S.
|
1,619
|
|
|
23
|
|
|
(10
|
)
|
|
1,632
|
|
Bath & Body Works Canada
|
102
|
|
|
1
|
|
|
—
|
|
|
103
|
|
Total Bath & Body Works
|
1,721
|
|
|
24
|
|
|
(10
|
)
|
|
1,735
|
|
Victoria’s Secret U.S.
|
1,098
|
|
|
3
|
|
|
(37
|
)
|
|
1,064
|
|
Victoria’s Secret Canada
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
Total Victoria's Secret
|
1,143
|
|
|
3
|
|
|
(37
|
)
|
|
1,109
|
|
Victoria's Secret U.K. / Ireland
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
Victoria's Secret Beauty and Accessories
|
38
|
|
|
6
|
|
|
(5
|
)
|
|
39
|
|
Victoria's Secret Greater China
|
15
|
|
|
3
|
|
|
—
|
|
|
18
|
|
Total Victoria's Secret and Bath & Body Works International
|
79
|
|
|
9
|
|
|
(5
|
)
|
|
83
|
|
Total L Brands Stores
|
2,943
|
|
|
36
|
|
|
(52
|
)
|
|
2,927
|
|
|
Stores at
|
|
|
|
|
|
Stores at
|
||||
|
February 2, 2019
|
|
Opened
|
|
Closed
|
|
August 3, 2019
|
||||
Bath & Body Works
|
235
|
|
|
14
|
|
|
(2
|
)
|
|
247
|
|
Victoria’s Secret Beauty & Accessories
|
383
|
|
|
15
|
|
|
(21
|
)
|
|
377
|
|
Victoria's Secret
|
56
|
|
|
7
|
|
|
—
|
|
|
63
|
|
Total
|
674
|
|
|
36
|
|
|
(23
|
)
|
|
687
|
|
|
|
|
|
|
Operating Income (Loss) Rate
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||
Second Quarter
|
(in millions)
|
|
|
|
|
||||||||
Bath & Body Works
|
$
|
326
|
|
|
$
|
180
|
|
|
27.2
|
%
|
|
17.0
|
%
|
Victoria’s Secret
|
(140
|
)
|
|
17
|
|
|
(14.4
|
%)
|
|
1.0
|
%
|
||
Victoria's Secret and Bath & Body Works International
|
(19
|
)
|
|
(1
|
)
|
|
(23.3
|
%)
|
|
(0.8
|
%)
|
||
Other (a)
|
(123
|
)
|
|
(21
|
)
|
|
(187.6
|
%)
|
|
(26.0
|
%)
|
||
Total Operating Income (Loss)
|
$
|
44
|
|
|
$
|
175
|
|
|
1.9
|
%
|
|
6.0
|
%
|
(a)
|
Includes sourcing and corporate functions.
|
|
2020
|
|
2019
|
|
% Change
|
|||||
Second Quarter
|
(in millions)
|
|
|
|||||||
Bath & Body Works Stores (a)
|
$
|
678
|
|
|
$
|
883
|
|
|
(23
|
%)
|
Bath & Body Works Direct
|
519
|
|
|
178
|
|
|
191
|
%
|
||
Total Bath & Body Works
|
1,197
|
|
|
1,061
|
|
|
13
|
%
|
||
Victoria’s Secret Stores (a)
|
364
|
|
|
1,233
|
|
|
(70
|
%)
|
||
Victoria’s Secret Direct
|
614
|
|
|
373
|
|
|
65
|
%
|
||
Total Victoria’s Secret
|
978
|
|
|
1,606
|
|
|
(39
|
%)
|
||
Victoria's Secret and Bath & Body Works International (b)
|
80
|
|
|
155
|
|
|
(48
|
%)
|
||
Other (c)
|
64
|
|
|
80
|
|
|
(19
|
%)
|
||
Total Net Sales
|
$
|
2,319
|
|
|
$
|
2,902
|
|
|
(20
|
%)
|
(a)
|
Includes company-owned stores in the U.S. and Canada.
|
(b)
|
Includes company-owned stores in the U.K., Ireland and Greater China, direct sales in Greater China and wholesale sales, royalties and other fees associated with non-company owned stores.
|
(c)
|
Includes wholesale revenues from our sourcing function.
|
|
Bath &
Body Works
|
|
Victoria’s
Secret
|
|
Victoria’s Secret
and
Bath & Body
Works
International
|
|
Other
|
|
Total
|
||||||||||
Second Quarter
|
(in millions)
|
||||||||||||||||||
2019 Net Sales
|
$
|
1,061
|
|
|
$
|
1,606
|
|
|
$
|
155
|
|
|
$
|
80
|
|
|
$
|
2,902
|
|
Comparable Store Sales
|
294
|
|
|
(37
|
)
|
|
(13
|
)
|
|
—
|
|
|
244
|
|
|||||
Sales Associated with New, Closed and Non-comparable Remodeled Stores, Net
|
(497
|
)
|
|
(810
|
)
|
|
(27
|
)
|
|
—
|
|
|
(1,334
|
)
|
|||||
Foreign Currency Translation
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Direct Channels
|
340
|
|
|
238
|
|
|
(1
|
)
|
|
—
|
|
|
577
|
|
|||||
Private Label Credit Card
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||
International Wholesale, Royalty and Other
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
(16
|
)
|
|
(49
|
)
|
|||||
2020 Net Sales
|
$
|
1,197
|
|
|
$
|
978
|
|
|
$
|
80
|
|
|
$
|
64
|
|
|
$
|
2,319
|
|
Second Quarter
|
2020
|
|
2019
|
||
Comparable Sales (Stores and Direct) (a)
|
|
|
|
||
Bath & Body Works (b)
|
123
|
%
|
|
8
|
%
|
Victoria's Secret (b)
|
28
|
%
|
|
(6
|
%)
|
Total Comparable Sales
|
63
|
%
|
|
(1
|
%)
|
|
|
|
|
||
Comparable Store Sales (a)
|
|
|
|
||
Bath & Body Works (b)
|
87
|
%
|
|
4
|
%
|
Victoria’s Secret (b)
|
(10
|
%)
|
|
(9
|
%)
|
Total Comparable Store Sales
|
33
|
%
|
|
(4
|
%)
|
(a)
|
The percentage change in comparable sales represents direct and comparable store sales. The percentage change in comparable store sales represents the change in sales at comparable stores only and excludes the change in sales from our direct channels. A store is typically included in the calculation of comparable sales when it has been open 12 months or more and it has not had a change in selling square footage of 20% or more. Stores are excluded from the comparable sales calculation if they have been closed for four consecutive days or more. Therefore, comparable sales results for the second quarter of 2020 exclude stores that were closed for four consecutive days or more as a result of the COVID-19 pandemic. Additionally, stores of a given brand are excluded if total selling square footage for the brand in the mall changes by 20% or more through the opening or closing of a second store. The percentage change in comparable sales is calculated on a comparable calendar period as opposed to a fiscal basis. Comparable sales attributable to our international stores are calculated on a constant currency basis.
|
(b)
|
Includes company-owned stores in the U.S. and Canada.
|
Second Quarter
|
2020
|
|
2019
|
||||
Average daily borrowings (in millions)
|
$
|
6,173
|
|
|
$
|
5,792
|
|
Average borrowing rate (in percentages)
|
6.8
|
%
|
|
6.6
|
%
|
|
|
|
|
|
Operating Income (Loss) Rate
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||
Year-to-Date
|
(in millions)
|
|
|
|
|
||||||||
Bath & Body Works
|
$
|
395
|
|
|
$
|
335
|
|
|
20.7
|
%
|
|
17.3
|
%
|
Victoria’s Secret
|
(440
|
)
|
|
49
|
|
|
(24.5
|
%)
|
|
1.6
|
%
|
||
Victoria’s Secret and Bath & Body Works International
|
(54
|
)
|
|
(5
|
)
|
|
(37.1
|
%)
|
|
(1.8
|
%)
|
||
Other (a)
|
(175
|
)
|
|
(51
|
)
|
|
(145.2
|
%)
|
|
(26.5
|
%)
|
||
Total Operating Income (Loss)
|
$
|
(274
|
)
|
|
$
|
328
|
|
|
(6.9
|
%)
|
|
5.9
|
%
|
(a)
|
Includes sourcing and corporate functions.
|
|
2020
|
|
2019
|
|
% Change
|
|||||
Year-to-Date
|
(in millions)
|
|
|
|||||||
Bath & Body Works Stores (a)
|
$
|
1,102
|
|
|
$
|
1,597
|
|
|
(31
|
%)
|
Bath & Body Works Direct
|
807
|
|
|
335
|
|
|
141
|
%
|
||
Total Bath & Body Works
|
1,909
|
|
|
1,932
|
|
|
(1
|
%)
|
||
Victoria’s Secret Stores (a)
|
877
|
|
|
2,381
|
|
|
(63
|
%)
|
||
Victoria’s Secret Direct
|
922
|
|
|
735
|
|
|
25
|
%
|
||
Total Victoria’s Secret
|
1,799
|
|
|
3,116
|
|
|
(42
|
%)
|
||
Victoria’s Secret and Bath & Body Works International (b)
|
146
|
|
|
289
|
|
|
(50
|
%)
|
||
Other (c)
|
120
|
|
|
193
|
|
|
(38
|
%)
|
||
Total Net Sales
|
$
|
3,974
|
|
|
$
|
5,530
|
|
|
(28
|
%)
|
(a)
|
Includes company-owned stores in the U.S. and Canada.
|
(b)
|
Includes company-owned stores in the U.K., Ireland and Greater China, direct sales in Greater China and wholesale sales, royalties and other fees associated with non-company owned stores.
|
(c)
|
Includes wholesale revenues from our sourcing function.
|
|
Bath &
Body Works
|
|
Victoria's Secret
|
|
Victoria’s Secret
and
Bath & Body Works International
|
|
Other
|
|
Total
|
||||||||||
Year-to-Date
|
(in millions)
|
||||||||||||||||||
2019 Net Sales
|
$
|
1,932
|
|
|
$
|
3,116
|
|
|
$
|
289
|
|
|
$
|
193
|
|
|
$
|
5,530
|
|
Comparable Store Sales
|
359
|
|
|
(121
|
)
|
|
(39
|
)
|
|
—
|
|
|
199
|
|
|||||
Sales Associated with New, Closed and Non-comparable Remodeled Stores, Net
|
(848
|
)
|
|
(1,342
|
)
|
|
(40
|
)
|
|
—
|
|
|
(2,230
|
)
|
|||||
Foreign Currency Translation
|
(7
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Direct Channels
|
473
|
|
|
185
|
|
|
(2
|
)
|
|
—
|
|
|
656
|
|
|||||
Private Label Credit Card
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|||||
International Wholesale, Royalty and Other
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
(73
|
)
|
|
(127
|
)
|
|||||
2020 Net Sales
|
$
|
1,909
|
|
|
$
|
1,799
|
|
|
$
|
146
|
|
|
$
|
120
|
|
|
$
|
3,974
|
|
Year-to-Date
|
2020
|
|
2019
|
||
Comparable Sales (Stores and Direct) (a)
|
|
|
|
||
Bath & Body Works (b)
|
84
|
%
|
|
10
|
%
|
Victoria's Secret (b)
|
6
|
%
|
|
(6
|
%)
|
Total Comparable Sales
|
32
|
%
|
|
(1
|
%)
|
|
|
|
|
||
Comparable Store Sales (a)
|
|
|
|
||
Bath & Body Works (b)
|
54
|
%
|
|
6
|
%
|
Victoria’s Secret (b)
|
(13
|
%)
|
|
(8
|
%)
|
Total Comparable Store Sales
|
12
|
%
|
|
(3
|
%)
|
(a)
|
The percentage change in comparable sales represents direct and comparable store sales. The percentage change in comparable store sales represents the change in sales at comparable stores only and excludes the change in sales from our direct channels. A store is typically included in the calculation of comparable sales when it has been open 12 months or more and it has not had a change in selling square footage of 20% or more. Stores are excluded from the comparable sales calculation if they have been closed for four consecutive days or more. Therefore, comparable sales results for 2020 exclude stores that were closed for four consecutive days or more as a result of the COVID-19 pandemic. Additionally, stores of a given brand are excluded if total selling square footage for the brand in the mall changes by 20% or more through the opening or closing of a second store. The percentage change in comparable sales is calculated on a comparable calendar period as opposed to a fiscal basis. Comparable sales attributable to our international stores are calculated on a constant currency basis.
|
(b)
|
Includes company-owned stores in the U.S. and Canada.
|
Year-to-Date
|
2020
|
|
2019
|
||||
Average daily borrowings (in millions)
|
$
|
6,125
|
|
|
$
|
5,835
|
|
Average borrowing rate (in percentages)
|
6.5
|
%
|
|
6.6
|
%
|
•
|
Furloughing most store associates as of April 5 during their temporary store closure, while continuing to provide healthcare benefits for eligible associates;
|
•
|
Suspending associate merit increases;
|
•
|
Temporarily reducing salaries for senior vice presidents and above by 20%;
|
•
|
Temporarily suspending cash compensation for all members of the Board of Directors;
|
•
|
Reducing 2020 forecasted capital expenditures from $550 million to approximately $250 million;
|
•
|
Reducing Spring (first and second quarter) inventory receipts versus last year by approximately 45% at Victoria's Secret and PINK, and by approximately 20% at Bath & Body Works;
|
•
|
Suspending the quarterly cash dividend beginning in the second quarter of fiscal 2020;
|
•
|
Suspending most store and select office rent payments during the temporary closures. We are in active discussions with our landlords to negotiate with respect to these rent payments and go-forward occupancy costs;
|
•
|
Converting the revolving credit facility to an asset-backed loan facility and issuing $1.25 billion in new notes; and
|
•
|
Extending payment terms to vendors.
|
|
August 1,
2020 |
|
February 1,
2020 |
|
August 3,
2019 |
||||||
|
(in millions)
|
||||||||||
Net Cash Provided by Operating Activities (a)
|
$
|
286
|
|
|
$
|
1,236
|
|
|
$
|
162
|
|
Capital Expenditures (a)
|
124
|
|
|
458
|
|
|
244
|
|
|||
Working Capital
|
1,072
|
|
|
873
|
|
|
437
|
|
|||
Capitalization:
|
|
|
|
|
|
||||||
Long-term Debt
|
6,269
|
|
|
5,487
|
|
|
5,475
|
|
|||
Shareholders’ Equity (Deficit)
|
(1,908
|
)
|
|
(1,499
|
)
|
|
(933
|
)
|
|||
Total Capitalization
|
$
|
4,361
|
|
|
$
|
3,988
|
|
|
$
|
4,542
|
|
Amounts Available Under the Credit Agreement (b)
|
$
|
—
|
|
|
$
|
981
|
|
|
$
|
990
|
|
(a)
|
The February 1, 2020 amounts represent a fifty-two-week period, and the August 1, 2020 and August 3, 2019 amounts represent twenty-six-week periods.
|
(b)
|
As of August 1, 2020, our borrowing base was $844 million but we were unable to draw upon the Credit Agreement as our consolidated cash balance exceeded $350 million. We had outstanding letters of credit, which reduce our availability under the Credit Agreement, of $61 million as of August 1, 2020, $19 million as of February 1, 2020 and $10 million as of August 3, 2019.
|
|
Year-to-Date
|
||||||
|
2020
|
|
2019
|
||||
|
(in millions)
|
||||||
Cash and Cash Equivalents and Restricted Cash, Beginning of Period
|
$
|
1,499
|
|
|
$
|
1,413
|
|
Net Cash Flows Provided by Operating Activities
|
286
|
|
|
162
|
|
||
Net Cash Flows Used for Investing Activities
|
(116
|
)
|
|
(237
|
)
|
||
Net Cash Flows Provided by (Used for) Financing Activities
|
1,071
|
|
|
(483
|
)
|
||
Effects of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash
|
(1
|
)
|
|
(2
|
)
|
||
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash
|
1,240
|
|
|
(560
|
)
|
||
Cash and Cash Equivalents and Restricted Cash, End of Period
|
$
|
2,739
|
|
|
$
|
853
|
|
|
|
Ordinary Dividends
|
|
Total Paid
|
||||
|
|
(per share)
|
|
(in millions)
|
||||
2020
|
|
|
|
|
||||
Second Quarter
|
|
$
|
—
|
|
|
$
|
—
|
|
First Quarter
|
|
0.30
|
|
|
83
|
|
||
Total
|
|
$
|
0.30
|
|
|
$
|
83
|
|
2019
|
|
|
|
|
||||
Second Quarter
|
|
$
|
0.30
|
|
|
$
|
83
|
|
First Quarter
|
|
0.30
|
|
|
83
|
|
||
Total
|
|
$
|
0.60
|
|
|
$
|
166
|
|
|
August 1,
2020 |
|
February 1,
2020 |
|
August 3,
2019 |
||||||
|
(in millions)
|
||||||||||
Senior Secured Debt with Subsidiary Guarantee
|
|
|
|
|
|
||||||
$750 million, 6.875% Fixed Interest Rate Secured Notes due July 2025 ("2025 Secured Notes")
|
$
|
739
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured Foreign Facilities
|
101
|
|
|
103
|
|
|
95
|
|
|||
Total Senior Secured Debt with Subsidiary Guarantee
|
$
|
840
|
|
|
$
|
103
|
|
|
$
|
95
|
|
Senior Debt with Subsidiary Guarantee
|
|
|
|
|
|
||||||
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)
|
$
|
991
|
|
|
$
|
991
|
|
|
$
|
990
|
|
$860 million, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)
|
858
|
|
|
858
|
|
|
857
|
|
|||
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)
|
693
|
|
|
693
|
|
|
693
|
|
|||
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)
|
498
|
|
|
498
|
|
|
498
|
|
|||
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)
|
496
|
|
|
496
|
|
|
496
|
|
|||
$500 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")
|
492
|
|
|
—
|
|
|
—
|
|
|||
$500 million, 7.50% Fixed Interest Rate Notes due June 2029 ("2029 Notes")
|
488
|
|
|
487
|
|
|
486
|
|
|||
$450 million, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)
|
450
|
|
|
450
|
|
|
449
|
|
|||
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)
|
277
|
|
|
276
|
|
|
274
|
|
|||
Total Senior Debt with Subsidiary Guarantee
|
$
|
5,243
|
|
|
$
|
4,749
|
|
|
$
|
4,743
|
|
Senior Debt
|
|
|
|
|
|
||||||
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)
|
$
|
348
|
|
|
$
|
348
|
|
|
$
|
348
|
|
$300 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)
|
298
|
|
|
298
|
|
|
297
|
|
|||
Unsecured Foreign Facilities
|
—
|
|
|
50
|
|
|
67
|
|
|||
Total Senior Debt
|
$
|
646
|
|
|
$
|
696
|
|
|
$
|
712
|
|
Total
|
$
|
6,729
|
|
|
$
|
5,548
|
|
|
$
|
5,550
|
|
Current Debt
|
(460
|
)
|
|
(61
|
)
|
|
(75
|
)
|
|||
Total Long-term Debt, Net of Current Portion
|
$
|
6,269
|
|
|
$
|
5,487
|
|
|
$
|
5,475
|
|
|
Moody’s
|
|
S&P
|
Senior Secured Debt
|
Ba2
|
|
BB
|
Corporate
|
B2
|
|
B+
|
Senior Unsecured Debt with Subsidiary Guarantee
|
B2
|
|
B+
|
Senior Unsecured Debt
|
Caa1
|
|
B-
|
Outlook
|
Negative
|
|
Negative
|
SUMMARIZED BALANCE SHEETS
|
August 1,
2020 |
|
February 1,
2020 |
||||
|
(in millions)
|
||||||
ASSETS
|
|
|
|
||||
Current Assets (a)
|
$
|
5,202
|
|
|
$
|
3,728
|
|
Noncurrent Assets
|
5,007
|
|
|
5,357
|
|
||
|
|
|
|
||||
LIABILITIES
|
|
|
|
||||
Current Liabilities (b)
|
$
|
4,923
|
|
|
$
|
4,163
|
|
Noncurrent Liabilities (c)
|
9,293
|
|
|
8,772
|
|
(a)
|
Includes amounts due from non-Guarantor subsidiaries of $1.255 billion and $1.091 billion as of August 1, 2020 and February 1, 2020, respectively.
|
(b)
|
Includes amounts due to non-Guarantor subsidiaries of $2.269 billion and $2.684 billion as of August 1, 2020 and February 1, 2020, respectively.
|
(c)
|
Includes amounts due to non-Guarantor subsidiaries of $476 million as of both August 1, 2020 and February 1, 2020.
|
SUMMARIZED STATEMENT OF LOSS
|
Year-to-Date
|
||
|
2020
|
||
|
(in millions)
|
||
Net Sales (a)
|
$
|
3,802
|
|
Gross Profit
|
970
|
|
|
Operating Loss
|
(173
|
)
|
|
Loss Before Income Taxes
|
(407
|
)
|
|
Net Loss (b)
|
(263
|
)
|
(a)
|
Includes net sales of $101 million to non-Guarantor subsidiaries.
|
(b)
|
Includes net loss of $7 million related to transactions with non-Guarantor subsidiaries.
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
August 1,
2020 |
|
February 1,
2020 |
|
August 3,
2019 |
||||||
|
(in millions)
|
||||||||||
Principal Value
|
$
|
6,708
|
|
|
$
|
5,458
|
|
|
$
|
5,458
|
|
Fair Value, Estimated (a)
|
6,692
|
|
|
5,555
|
|
|
5,215
|
|
(a)
|
The estimated fair value is based on reported transaction prices. The estimates presented are not necessarily indicative of the amounts that we could realize in a current market exchange.
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total
Number of
Shares
Purchased (a)
|
|
Average Price
Paid per
Share (b)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs (c)
|
|
Maximum Number of Shares (or Approximate Dollar Value) that May Yet be Purchased Under the Programs (c)
|
||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
||||||||
May 2020
|
74
|
|
|
$
|
10.31
|
|
|
—
|
|
|
$
|
78,677
|
|
June 2020
|
23
|
|
|
17.50
|
|
|
—
|
|
|
78,677
|
|
||
July 2020
|
4
|
|
|
20.39
|
|
|
—
|
|
|
78,677
|
|
||
Total
|
101
|
|
|
|
|
—
|
|
|
|
(a)
|
The total number of shares repurchased includes shares repurchased in connection with tax payments due upon vesting of employee restricted stock awards and the use of our stock to pay the exercise price on employee stock options.
|
(b)
|
The average price paid per share includes any broker commissions.
|
(c)
|
For additional share repurchase program information, see Note 5, “Earnings (Loss) Per Share and Shareholders' Equity (Deficit)” included in Item 1. Financial Statements.
|
Item 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
OTHER INFORMATION
|
Exhibits
|
|
|
|
|
|
15
|
|
|
|
|
|
22
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Definition Linkbase Document
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
|
L BRANDS, INC.
|
|
|
(Registrant)
|
|
|
By:
|
/s/ STUART B. BURGDOERFER
|
|
|
Stuart B. Burgdoerfer
Executive Vice President and Chief Financial Officer *
|
*
|
Mr. Burgdoerfer is the principal financial officer and the principal accounting officer and has been duly authorized to sign on behalf of the Registrant.
|
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