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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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31-1029810
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer Identification No.)
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Three Limited Parkway
Columbus, Ohio
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43230
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(Address of principal executive offices)
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(Zip Code)
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(614) 415-7000
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(Registrant's Telephone Number, Including Area Code)
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.50 Par Value
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LB
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The New York Stock Exchange
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Page No.
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Item 1.
Financial Statements *
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Item 4.
Controls and Procedures
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Item 1.
Legal Proceedings
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Item 1A.
Risk Factors
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Item 3.
Defaults Upon Senior Securities
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Item 4.
Mine Safety Disclosures
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Item 5.
Other Information
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Item 6.
Exhibits
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*
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The Company's fiscal year ends on the Saturday nearest to January 31. As used herein, “first quarter of 2019” and “first quarter of 2018” refer to the thirteen-week periods ended May 4, 2019 and May 5, 2018, respectively.
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Item 1.
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FINANCIAL STATEMENTS
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First Quarter
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||||||
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2019
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|
2018
|
||||
Net Sales
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$
|
2,629
|
|
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$
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2,626
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|
Costs of Goods Sold, Buying and Occupancy
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(1,695
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)
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(1,682
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)
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||
Gross Profit
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934
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944
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General, Administrative and Store Operating Expenses
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(781
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)
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(789
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)
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||
Operating Income
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153
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|
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155
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|
||
Interest Expense
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(99
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)
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(98
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)
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||
Other Income
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6
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|
|
2
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||
Income Before Income Taxes
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60
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59
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Provision for Income Taxes
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20
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11
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Net Income
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$
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40
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$
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48
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Net Income Per Basic Share
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$
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0.15
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$
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0.17
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Net Income Per Diluted Share
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$
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0.14
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$
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0.17
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Dividends Per Share
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$
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0.30
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$
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0.60
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First Quarter
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||||||
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2019
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|
2018
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||||
Net Income
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$
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40
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$
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48
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|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
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||||
Foreign Currency Translation
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(4
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)
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(13
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)
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||
Unrealized Gain on Cash Flow Hedges
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2
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6
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Reclassification of Cash Flow Hedges to Earnings
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(2
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)
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2
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||
Total Other Comprehensive Income (Loss), Net of Tax
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(4
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)
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(5
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)
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||
Total Comprehensive Income
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$
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36
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|
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$
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43
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May 4,
2019 |
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February 2,
2019 |
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May 5,
2018 |
||||||
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(Unaudited)
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(Unaudited)
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||||||
ASSETS
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||||||
Current Assets:
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||||||
Cash and Cash Equivalents
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$
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1,146
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$
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1,413
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$
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1,032
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Accounts Receivable, Net
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274
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367
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274
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Inventories
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1,357
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1,248
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1,350
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Other
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170
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|
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232
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|
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234
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|||
Total Current Assets
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2,947
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3,260
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2,890
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|||
Property and Equipment, Net
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2,794
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2,818
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2,894
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|||
Operating Lease Assets
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3,271
|
|
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—
|
|
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—
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|||
Goodwill
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1,348
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|
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1,348
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1,348
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|||
Trade Names
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411
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411
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411
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|||
Deferred Income Taxes
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61
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62
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22
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|||
Other Assets
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166
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|
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191
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|
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184
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|||
Total Assets
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$
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10,998
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$
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8,090
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$
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7,749
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LIABILITIES AND EQUITY (DEFICIT)
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||||||
Current Liabilities:
|
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||||||
Accounts Payable
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$
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688
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$
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711
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$
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717
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Accrued Expenses and Other
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872
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1,082
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848
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Current Debt
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72
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72
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89
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|
|||
Current Operating Lease Liabilities
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443
|
|
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—
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|
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—
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|||
Income Taxes
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122
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|
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121
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|
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204
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|
|||
Total Current Liabilities
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2,197
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1,986
|
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1,858
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|||
Deferred Income Taxes
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238
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226
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|
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234
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Long-term Debt
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5,749
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5,739
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5,719
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Long-term Operating Lease Liabilities
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3,234
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|
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—
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—
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Other Long-term Liabilities
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478
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1,004
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907
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|||
Shareholders’ Equity (Deficit):
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||||||
Preferred Stock - $1.00 par value; 10 shares authorized; none issued
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—
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—
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—
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Common Stock - $0.50 par value; 1,000 shares authorized; 284, 283 and 283 shares issued; 276, 275 and 278 shares outstanding, respectively
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142
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141
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141
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Paid-in Capital
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786
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771
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696
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Accumulated Other Comprehensive Income
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55
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59
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17
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Retained Earnings (Deficit)
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(1,527
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)
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(1,482
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)
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(1,580
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)
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Less: Treasury Stock, at Average Cost; 8, 8 and 5 shares, respectively
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(358
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)
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(358
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)
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(245
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)
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|||
Total L Brands, Inc. Shareholders’ Equity (Deficit)
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(902
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)
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(869
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)
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(971
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)
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|||
Noncontrolling Interest
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4
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4
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2
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|
|||
Total Equity (Deficit)
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(898
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)
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|
(865
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)
|
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(969
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)
|
|||
Total Liabilities and Equity (Deficit)
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$
|
10,998
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|
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$
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8,090
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$
|
7,749
|
|
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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
|
)
|
|
—
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|
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—
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|
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(2
|
)
|
|||||||
Balance, February 3, 2019
|
275
|
|
|
141
|
|
|
771
|
|
|
59
|
|
|
(1,484
|
)
|
|
(358
|
)
|
|
4
|
|
|
(867
|
)
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||||
Other Comprehensive Income (Loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Total Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
40
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||||
Cash Dividends ($0.30 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|||||||
Share-based Compensation and Other
|
1
|
|
|
1
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||||
Balance, May 4, 2019
|
276
|
|
|
$
|
142
|
|
|
$
|
786
|
|
|
$
|
55
|
|
|
$
|
(1,527
|
)
|
|
$
|
(358
|
)
|
|
$
|
4
|
|
|
$
|
(898
|
)
|
|
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 3, 2018
|
280
|
|
|
$
|
141
|
|
|
$
|
678
|
|
|
$
|
24
|
|
|
$
|
(1,434
|
)
|
|
$
|
(162
|
)
|
|
$
|
2
|
|
|
$
|
(751
|
)
|
Cumulative Effect of Accounting Changes
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|||||||
Balance, February 4, 2018
|
280
|
|
|
141
|
|
|
678
|
|
|
22
|
|
|
(1,460
|
)
|
|
(162
|
)
|
|
2
|
|
|
(779
|
)
|
|||||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|||||||
Other Comprehensive Income (Loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||||
Total Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
48
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||||
Cash Dividends ($0.60 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|||||||
Repurchase of Common Stock
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
(83
|
)
|
|||||||
Share-based Compensation and Other
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||||
Balance, May 5, 2018
|
278
|
|
|
$
|
141
|
|
|
$
|
696
|
|
|
$
|
17
|
|
|
$
|
(1,580
|
)
|
|
$
|
(245
|
)
|
|
$
|
2
|
|
|
$
|
(969
|
)
|
|
Year-to-Date
|
||||||
|
2019
|
|
2018
|
||||
Operating Activities:
|
|
|
|
||||
Net Income
|
$
|
40
|
|
|
$
|
48
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by (Used for) Operating Activities:
|
|
|
|
||||
Depreciation of Long-lived Assets
|
145
|
|
|
148
|
|
||
Amortization of Landlord Allowances
|
—
|
|
|
(11
|
)
|
||
Share-based Compensation Expense
|
23
|
|
|
25
|
|
||
Deferred Income Taxes
|
12
|
|
|
(13
|
)
|
||
Gains on Distributions from Easton Investments
|
(2
|
)
|
|
—
|
|
||
Changes in Assets and Liabilities:
|
|
|
|
||||
Accounts Receivable
|
65
|
|
|
41
|
|
||
Inventories
|
(110
|
)
|
|
(114
|
)
|
||
Accounts Payable, Accrued Expenses and Other
|
(231
|
)
|
|
(219
|
)
|
||
Income Taxes Payable
|
4
|
|
|
7
|
|
||
Other Assets and Liabilities
|
(19
|
)
|
|
9
|
|
||
Net Cash Used for Operating Activities
|
(73
|
)
|
|
(79
|
)
|
||
Investing Activities:
|
|
|
|
||||
Capital Expenditures
|
(123
|
)
|
|
(160
|
)
|
||
Proceeds from Divestiture of La Senza
|
12
|
|
|
—
|
|
||
Proceeds from Sales of Marketable Equity Securities
|
3
|
|
|
—
|
|
||
Return of Capital from Easton Investments
|
2
|
|
|
1
|
|
||
Net Cash Used for Investing Activities
|
(106
|
)
|
|
(159
|
)
|
||
Financing Activities:
|
|
|
|
||||
Borrowings from Foreign Facilities
|
21
|
|
|
21
|
|
||
Repayments of Foreign Facilities
|
(14
|
)
|
|
(8
|
)
|
||
Dividends Paid
|
(83
|
)
|
|
(168
|
)
|
||
Repurchases of Common Stock
|
—
|
|
|
(81
|
)
|
||
Tax Payments related to Share-based Awards
|
(9
|
)
|
|
(8
|
)
|
||
Proceeds from Exercise of Stock Options
|
1
|
|
|
1
|
|
||
Financing Costs and Other
|
(2
|
)
|
|
—
|
|
||
Net Cash Used for Financing Activities
|
(86
|
)
|
|
(243
|
)
|
||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
(2
|
)
|
|
(2
|
)
|
||
Net Decrease in Cash and Cash Equivalents
|
(267
|
)
|
|
(483
|
)
|
||
Cash and Cash Equivalents, Beginning of Period
|
1,413
|
|
|
1,515
|
|
||
Cash and Cash Equivalents, End of Period
|
$
|
1,146
|
|
|
$
|
1,032
|
|
•
|
Victoria’s Secret
|
•
|
PINK
|
•
|
Bath & Body Works
|
|
First Quarter
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Victoria’s Secret Stores (a)
|
$
|
1,149
|
|
|
$
|
1,236
|
|
Victoria’s Secret Direct
|
362
|
|
|
353
|
|
||
Total Victoria’s Secret
|
1,511
|
|
|
1,589
|
|
||
Bath & Body Works Stores (a)
|
715
|
|
|
649
|
|
||
Bath & Body Works Direct
|
156
|
|
|
112
|
|
||
Total Bath & Body Works
|
871
|
|
|
761
|
|
||
Victoria's Secret and Bath & Body Works International (b)
|
135
|
|
|
135
|
|
||
Other (c)
|
112
|
|
|
141
|
|
||
Total Net Sales
|
$
|
2,629
|
|
|
$
|
2,626
|
|
(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. Results for 2018 also include store and direct sales for La Senza and Henri Bendel.
|
|
First Quarter
|
||||
|
2019
|
|
2018
|
||
|
(in millions)
|
||||
Weighted-average Common Shares:
|
|
|
|
||
Issued Shares
|
284
|
|
|
283
|
|
Treasury Shares
|
(8
|
)
|
|
(4
|
)
|
Basic Shares
|
276
|
|
|
279
|
|
Effect of Dilutive Options and Restricted Stock
|
2
|
|
|
3
|
|
Diluted Shares
|
278
|
|
|
282
|
|
Anti-dilutive Options and Awards (a)
|
5
|
|
|
5
|
|
(a)
|
These options and awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
|
|
Amount
Authorized
|
|
Shares
Repurchased
|
|
Amount
Repurchased
|
|
Average Stock Price of Shares Repurchased within Program
|
|||||||
Repurchase Program
|
|
|
|
|||||||||||
|
(in millions)
|
|
(in thousands)
|
|
(in millions)
|
|
|
|||||||
March 2018
|
$
|
250
|
|
|
1,563
|
|
|
$
|
58
|
|
|
$
|
36.93
|
|
September 2017
|
250
|
|
|
527
|
|
|
25
|
|
|
$
|
46.98
|
|
||
Total
|
|
|
2,090
|
|
|
$
|
83
|
|
|
|
|
|
Ordinary Dividends
|
|
Total Paid
|
||||
|
|
(per share)
|
|
(in millions)
|
||||
2019
|
|
|
|
|
||||
First Quarter
|
|
$
|
0.30
|
|
|
$
|
83
|
|
2018
|
|
|
|
|
||||
First Quarter
|
|
$
|
0.60
|
|
|
$
|
168
|
|
|
May 4,
2019 |
|
February 2,
2019 |
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Finished Goods Merchandise
|
$
|
1,225
|
|
|
$
|
1,107
|
|
|
$
|
1,225
|
|
Raw Materials and Merchandise Components
|
132
|
|
|
141
|
|
|
125
|
|
|||
Total Inventories
|
$
|
1,357
|
|
|
$
|
1,248
|
|
|
$
|
1,350
|
|
|
May 4,
2019 |
|
February 2,
2019 |
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Property and Equipment, at Cost
|
$
|
6,744
|
|
|
$
|
6,733
|
|
|
$
|
6,760
|
|
Accumulated Depreciation and Amortization
|
(3,950
|
)
|
|
(3,915
|
)
|
|
(3,866
|
)
|
|||
Property and Equipment, Net
|
$
|
2,794
|
|
|
$
|
2,818
|
|
|
$
|
2,894
|
|
Fiscal Year
|
(in millions)
|
||
2019
|
$
|
474
|
|
2020
|
692
|
|
|
2021
|
654
|
|
|
2022
|
585
|
|
|
2023
|
528
|
|
|
Thereafter
|
1,800
|
|
|
Total Lease Payments
|
$
|
4,733
|
|
Less: Interest
|
(1,056
|
)
|
|
Present Value of Operating Lease Liabilities
|
$
|
3,677
|
|
Weighted Average Remaining Lease Term (years)
|
7.8
|
|
Weighted Average Discount Rate
|
6.1
|
%
|
Fiscal Year (a)
|
(in millions)
|
||
2019
|
$
|
698
|
|
2020
|
676
|
|
|
2021
|
630
|
|
|
2022
|
562
|
|
|
2023
|
504
|
|
|
Thereafter
|
$
|
1,738
|
|
(a)
|
Excludes additional payments covering taxes, common area costs and certain other expenses generally required by store lease terms.
|
|
May 4,
2019 |
|
February 2,
2019 |
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Senior Debt with Subsidiary Guarantee
|
|
|
|
|
|
||||||
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)
|
$
|
990
|
|
|
$
|
990
|
|
|
$
|
990
|
|
$956 million, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)
|
952
|
|
|
952
|
|
|
994
|
|
|||
$780 million, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)
|
777
|
|
|
776
|
|
|
995
|
|
|||
$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
|
|
|
497
|
|
|||
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)
|
496
|
|
|
496
|
|
|
495
|
|
|||
$338 million, 7.00% Fixed Interest Rate Notes due May 2020 (“2020 Notes”)
|
338
|
|
|
337
|
|
|
398
|
|
|||
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)
|
274
|
|
|
273
|
|
|
—
|
|
|||
Secured Foreign Facilities
|
91
|
|
|
91
|
|
|
12
|
|
|||
Total Senior Debt with Subsidiary Guarantee
|
$
|
5,109
|
|
|
$
|
5,106
|
|
|
$
|
5,074
|
|
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”)
|
297
|
|
|
297
|
|
|
297
|
|
|||
Unsecured Foreign Facilities
|
67
|
|
|
60
|
|
|
89
|
|
|||
Total Senior Debt
|
$
|
712
|
|
|
$
|
705
|
|
|
$
|
734
|
|
Total
|
$
|
5,821
|
|
|
$
|
5,811
|
|
|
$
|
5,808
|
|
Current Debt
|
(72
|
)
|
|
(72
|
)
|
|
(89
|
)
|
|||
Total Long-term Debt, Net of Current Portion
|
$
|
5,749
|
|
|
$
|
5,739
|
|
|
$
|
5,719
|
|
|
May 4,
2019 |
|
February 2,
2019 |
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Notional Amount
|
$
|
152
|
|
|
$
|
147
|
|
|
$
|
208
|
|
|
May 4,
2019 |
|
February 2,
2019 |
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Other Current Assets
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
1
|
|
Accrued Expenses and Other
|
—
|
|
|
—
|
|
|
2
|
|
|
First Quarter
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Gain (Loss) Recognized in Accumulated Other Comprehensive Income
|
$
|
2
|
|
|
$
|
6
|
|
(Gain) Loss Reclassified from Accumulated Other Comprehensive Income into Costs of Goods Sold, Buying and Occupancy Expense
|
(2
|
)
|
|
2
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
As of May 4, 2019
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
$
|
1,146
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,146
|
|
Marketable Equity Securities
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
As of February 2, 2019
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
$
|
1,413
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,413
|
|
Marketable Equity Securities
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
As of May 5, 2018
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
$
|
1,032
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,032
|
|
Marketable Equity Securities
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
May 4,
2019 |
|
February 2,
2019 |
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Principal Value
|
$
|
5,722
|
|
|
$
|
5,722
|
|
|
$
|
5,750
|
|
Fair Value (a)
|
5,486
|
|
|
5,340
|
|
|
5,735
|
|
(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 2, 2019
|
$
|
57
|
|
|
$
|
2
|
|
|
$
|
59
|
|
Other Comprehensive Income (Loss) Before Reclassifications
|
(4
|
)
|
|
2
|
|
|
(2
|
)
|
|||
Amounts Reclassified from Accumulated Other Comprehensive Income
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Tax Effect
|
—
|
|
|
—
|
|
|
—
|
|
|||
Current-period Other Comprehensive Income (Loss)
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Balance as of May 4, 2019
|
$
|
53
|
|
|
$
|
2
|
|
|
$
|
55
|
|
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Marketable Equity Securities
|
|
Accumulated Other Comprehensive Income
|
||||||||
|
(in millions)
|
||||||||||||||
Balance as of February 3, 2018
|
$
|
32
|
|
|
$
|
(10
|
)
|
|
$
|
2
|
|
|
$
|
24
|
|
Amount reclassified to Retained Earnings upon adoption of ASC 321,
Investments - Equity Securities
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Balance as of February 4, 2018
|
32
|
|
|
(10
|
)
|
|
—
|
|
|
22
|
|
||||
Other Comprehensive Income (Loss) Before Reclassifications
|
(13
|
)
|
|
6
|
|
|
—
|
|
|
(7
|
)
|
||||
Amounts Reclassified from Accumulated Other Comprehensive Income
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Tax Effect
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Current-period Other Comprehensive Income (Loss)
|
(13
|
)
|
|
8
|
|
|
—
|
|
|
(5
|
)
|
||||
Balance as of May 5, 2018
|
$
|
19
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
17
|
|
•
|
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 stores operated by partners under franchise, license and wholesale arrangements.
|
|
Victoria’s
Secret
|
|
Bath &
Body Works
|
|
Victoria’s Secret
and
Bath & Body Works International
|
|
Other
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
||||||||||
First Quarter
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,511
|
|
|
$
|
871
|
|
|
$
|
135
|
|
|
$
|
112
|
|
|
$
|
2,629
|
|
Operating Income (Loss)
|
33
|
|
|
155
|
|
|
(4
|
)
|
|
(31
|
)
|
|
153
|
|
|||||
2018
|
|
|
|
|
|
|
|
|
|
||||||||||
First Quarter
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,589
|
|
|
$
|
761
|
|
|
$
|
135
|
|
|
$
|
141
|
|
|
$
|
2,626
|
|
Operating Income (Loss)
|
83
|
|
|
124
|
|
|
(5
|
)
|
|
(47
|
)
|
|
155
|
|
|
May 4, 2019
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
|
$
|
731
|
|
|
$
|
415
|
|
|
$
|
—
|
|
|
$
|
1,146
|
|
Accounts Receivable, Net
|
—
|
|
|
153
|
|
|
121
|
|
|
—
|
|
|
274
|
|
|||||
Inventories
|
—
|
|
|
1,235
|
|
|
122
|
|
|
—
|
|
|
1,357
|
|
|||||
Other
|
—
|
|
|
85
|
|
|
85
|
|
|
—
|
|
|
170
|
|
|||||
Total Current Assets
|
—
|
|
|
2,204
|
|
|
743
|
|
|
—
|
|
|
2,947
|
|
|||||
Property and Equipment, Net
|
—
|
|
|
1,895
|
|
|
899
|
|
|
—
|
|
|
2,794
|
|
|||||
Operating Lease Assets
|
—
|
|
|
2,665
|
|
|
606
|
|
|
—
|
|
|
3,271
|
|
|||||
Goodwill
|
—
|
|
|
1,318
|
|
|
30
|
|
|
—
|
|
|
1,348
|
|
|||||
Trade Names
|
—
|
|
|
411
|
|
|
—
|
|
|
—
|
|
|
411
|
|
|||||
Net Investments in and Advances to/from Consolidated Affiliates
|
4,698
|
|
|
19,854
|
|
|
2,223
|
|
|
(26,775
|
)
|
|
—
|
|
|||||
Deferred Income Taxes
|
—
|
|
|
9
|
|
|
52
|
|
|
—
|
|
|
61
|
|
|||||
Other Assets
|
127
|
|
|
12
|
|
|
639
|
|
|
(612
|
)
|
|
166
|
|
|||||
Total Assets
|
$
|
4,825
|
|
|
$
|
28,368
|
|
|
$
|
5,192
|
|
|
$
|
(27,387
|
)
|
|
$
|
10,998
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts Payable
|
$
|
—
|
|
|
$
|
378
|
|
|
$
|
310
|
|
|
$
|
—
|
|
|
$
|
688
|
|
Accrued Expenses and Other
|
61
|
|
|
485
|
|
|
326
|
|
|
—
|
|
|
872
|
|
|||||
Current Debt
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
|||||
Current Operating Lease Liabilities
|
—
|
|
|
358
|
|
|
85
|
|
|
—
|
|
|
443
|
|
|||||
Income Taxes
|
(7
|
)
|
|
102
|
|
|
27
|
|
|
—
|
|
|
122
|
|
|||||
Total Current Liabilities
|
54
|
|
|
1,323
|
|
|
820
|
|
|
—
|
|
|
2,197
|
|
|||||
Deferred Income Taxes
|
1
|
|
|
(42
|
)
|
|
279
|
|
|
—
|
|
|
238
|
|
|||||
Long-term Debt
|
5,663
|
|
|
597
|
|
|
86
|
|
|
(597
|
)
|
|
5,749
|
|
|||||
Long-term Operating Lease Liabilities
|
—
|
|
|
2,671
|
|
|
563
|
|
|
—
|
|
|
3,234
|
|
|||||
Other Long-term Liabilities
|
60
|
|
|
406
|
|
|
27
|
|
|
(15
|
)
|
|
478
|
|
|||||
Total Equity (Deficit)
|
(953
|
)
|
|
23,413
|
|
|
3,417
|
|
|
(26,775
|
)
|
|
(898
|
)
|
|||||
Total Liabilities and Equity (Deficit)
|
$
|
4,825
|
|
|
$
|
28,368
|
|
|
$
|
5,192
|
|
|
$
|
(27,387
|
)
|
|
$
|
10,998
|
|
|
February 2, 2019
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
|
$
|
997
|
|
|
$
|
416
|
|
|
$
|
—
|
|
|
$
|
1,413
|
|
Accounts Receivable, Net
|
—
|
|
|
241
|
|
|
126
|
|
|
—
|
|
|
367
|
|
|||||
Inventories
|
—
|
|
|
1,093
|
|
|
155
|
|
|
—
|
|
|
1,248
|
|
|||||
Other
|
—
|
|
|
139
|
|
|
93
|
|
|
—
|
|
|
232
|
|
|||||
Total Current Assets
|
—
|
|
|
2,470
|
|
|
790
|
|
|
—
|
|
|
3,260
|
|
|||||
Property and Equipment, Net
|
—
|
|
|
1,922
|
|
|
896
|
|
|
—
|
|
|
2,818
|
|
|||||
Goodwill
|
—
|
|
|
1,318
|
|
|
30
|
|
|
—
|
|
|
1,348
|
|
|||||
Trade Names
|
—
|
|
|
411
|
|
|
—
|
|
|
—
|
|
|
411
|
|
|||||
Net Investments in and Advances to/from Consolidated Affiliates
|
4,755
|
|
|
19,737
|
|
|
2,047
|
|
|
(26,539
|
)
|
|
—
|
|
|||||
Deferred Income Taxes
|
—
|
|
|
9
|
|
|
53
|
|
|
—
|
|
|
62
|
|
|||||
Other Assets
|
127
|
|
|
15
|
|
|
670
|
|
|
(621
|
)
|
|
191
|
|
|||||
Total Assets
|
$
|
4,882
|
|
|
$
|
25,882
|
|
|
$
|
4,486
|
|
|
$
|
(27,160
|
)
|
|
$
|
8,090
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts Payable
|
$
|
—
|
|
|
$
|
363
|
|
|
$
|
348
|
|
|
$
|
—
|
|
|
$
|
711
|
|
Accrued Expenses and Other
|
92
|
|
|
597
|
|
|
393
|
|
|
—
|
|
|
1,082
|
|
|||||
Current Debt
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
|||||
Income Taxes
|
(7
|
)
|
|
100
|
|
|
28
|
|
|
—
|
|
|
121
|
|
|||||
Total Current Liabilities
|
85
|
|
|
1,060
|
|
|
841
|
|
|
—
|
|
|
1,986
|
|
|||||
Deferred Income Taxes
|
1
|
|
|
(44
|
)
|
|
269
|
|
|
—
|
|
|
226
|
|
|||||
Long-term Debt
|
5,661
|
|
|
606
|
|
|
79
|
|
|
(607
|
)
|
|
5,739
|
|
|||||
Other Long-term Liabilities
|
59
|
|
|
852
|
|
|
107
|
|
|
(14
|
)
|
|
1,004
|
|
|||||
Total Equity (Deficit)
|
(924
|
)
|
|
23,408
|
|
|
3,190
|
|
|
(26,539
|
)
|
|
(865
|
)
|
|||||
Total Liabilities and Equity (Deficit)
|
$
|
4,882
|
|
|
$
|
25,882
|
|
|
$
|
4,486
|
|
|
$
|
(27,160
|
)
|
|
$
|
8,090
|
|
|
May 5, 2018
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
|
$
|
677
|
|
|
$
|
355
|
|
|
$
|
—
|
|
|
$
|
1,032
|
|
Accounts Receivable, Net
|
—
|
|
|
152
|
|
|
122
|
|
|
—
|
|
|
274
|
|
|||||
Inventories
|
—
|
|
|
1,199
|
|
|
151
|
|
|
—
|
|
|
1,350
|
|
|||||
Other
|
1
|
|
|
136
|
|
|
97
|
|
|
—
|
|
|
234
|
|
|||||
Total Current Assets
|
1
|
|
|
2,164
|
|
|
725
|
|
|
—
|
|
|
2,890
|
|
|||||
Property and Equipment, Net
|
—
|
|
|
1,970
|
|
|
924
|
|
|
—
|
|
|
2,894
|
|
|||||
Goodwill
|
—
|
|
|
1,318
|
|
|
30
|
|
|
—
|
|
|
1,348
|
|
|||||
Trade Names
|
—
|
|
|
411
|
|
|
—
|
|
|
—
|
|
|
411
|
|
|||||
Net Investments in and Advances to/from Consolidated Affiliates
|
4,751
|
|
|
18,908
|
|
|
2,025
|
|
|
(25,684
|
)
|
|
—
|
|
|||||
Deferred Income Taxes
|
—
|
|
|
9
|
|
|
13
|
|
|
—
|
|
|
22
|
|
|||||
Other Assets
|
129
|
|
|
16
|
|
|
651
|
|
|
(612
|
)
|
|
184
|
|
|||||
Total Assets
|
$
|
4,881
|
|
|
$
|
24,796
|
|
|
$
|
4,368
|
|
|
$
|
(26,296
|
)
|
|
$
|
7,749
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts Payable
|
$
|
5
|
|
|
$
|
350
|
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
717
|
|
Accrued Expenses and Other
|
59
|
|
|
461
|
|
|
328
|
|
|
—
|
|
|
848
|
|
|||||
Current Debt
|
—
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
89
|
|
|||||
Income Taxes
|
6
|
|
|
176
|
|
|
22
|
|
|
—
|
|
|
204
|
|
|||||
Total Current Liabilities
|
70
|
|
|
987
|
|
|
801
|
|
|
—
|
|
|
1,858
|
|
|||||
Deferred Income Taxes
|
(2
|
)
|
|
(41
|
)
|
|
277
|
|
|
—
|
|
|
234
|
|
|||||
Long-term Debt
|
5,707
|
|
|
597
|
|
|
12
|
|
|
(597
|
)
|
|
5,719
|
|
|||||
Other Long-term Liabilities
|
62
|
|
|
762
|
|
|
98
|
|
|
(15
|
)
|
|
907
|
|
|||||
Total Equity (Deficit)
|
(956
|
)
|
|
22,491
|
|
|
3,180
|
|
|
(25,684
|
)
|
|
(969
|
)
|
|||||
Total Liabilities and Equity (Deficit)
|
$
|
4,881
|
|
|
$
|
24,796
|
|
|
$
|
4,368
|
|
|
$
|
(26,296
|
)
|
|
$
|
7,749
|
|
|
First Quarter 2019
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Sales
|
$
|
—
|
|
|
$
|
2,488
|
|
|
$
|
754
|
|
|
$
|
(613
|
)
|
|
$
|
2,629
|
|
Costs of Goods Sold, Buying and Occupancy
|
—
|
|
|
(1,649
|
)
|
|
(587
|
)
|
|
541
|
|
|
(1,695
|
)
|
|||||
Gross Profit
|
—
|
|
|
839
|
|
|
167
|
|
|
(72
|
)
|
|
934
|
|
|||||
General, Administrative and Store Operating Expenses
|
(5
|
)
|
|
(737
|
)
|
|
(89
|
)
|
|
50
|
|
|
(781
|
)
|
|||||
Operating Income (Loss)
|
(5
|
)
|
|
102
|
|
|
78
|
|
|
(22
|
)
|
|
153
|
|
|||||
Interest Expense
|
(97
|
)
|
|
(23
|
)
|
|
(1
|
)
|
|
22
|
|
|
(99
|
)
|
|||||
Other Income (Loss)
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Income (Loss) Before Income Taxes
|
(102
|
)
|
|
85
|
|
|
77
|
|
|
—
|
|
|
60
|
|
|||||
Provision for Income Taxes
|
—
|
|
|
8
|
|
|
12
|
|
|
—
|
|
|
20
|
|
|||||
Equity in Earnings (Loss), Net of Tax
|
142
|
|
|
66
|
|
|
4
|
|
|
(212
|
)
|
|
—
|
|
|||||
Net Income (Loss)
|
$
|
40
|
|
|
$
|
143
|
|
|
$
|
69
|
|
|
$
|
(212
|
)
|
|
$
|
40
|
|
|
First Quarter 2019
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Income (Loss)
|
$
|
40
|
|
|
$
|
143
|
|
|
$
|
69
|
|
|
$
|
(212
|
)
|
|
$
|
40
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Currency Translation
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Unrealized Gain (Loss) on Cash Flow Hedges
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Reclassification of Cash Flow Hedges to Earnings
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Total Other Comprehensive Income (Loss), Net of Tax
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Total Comprehensive Income (Loss)
|
$
|
40
|
|
|
$
|
143
|
|
|
$
|
65
|
|
|
$
|
(212
|
)
|
|
$
|
36
|
|
|
First Quarter 2018
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Sales
|
$
|
—
|
|
|
$
|
2,466
|
|
|
$
|
839
|
|
|
$
|
(679
|
)
|
|
$
|
2,626
|
|
Costs of Goods Sold, Buying and Occupancy
|
—
|
|
|
(1,622
|
)
|
|
(669
|
)
|
|
609
|
|
|
(1,682
|
)
|
|||||
Gross Profit
|
—
|
|
|
844
|
|
|
170
|
|
|
(70
|
)
|
|
944
|
|
|||||
General, Administrative and Store Operating Expenses
|
(4
|
)
|
|
(726
|
)
|
|
(109
|
)
|
|
50
|
|
|
(789
|
)
|
|||||
Operating Income (Loss)
|
(4
|
)
|
|
118
|
|
|
61
|
|
|
(20
|
)
|
|
155
|
|
|||||
Interest Expense
|
(97
|
)
|
|
(20
|
)
|
|
(3
|
)
|
|
22
|
|
|
(98
|
)
|
|||||
Other Income
|
—
|
|
|
4
|
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
|||||
Income (Loss) Before Income Taxes
|
(101
|
)
|
|
102
|
|
|
56
|
|
|
2
|
|
|
59
|
|
|||||
Provision for Income Taxes
|
(2
|
)
|
|
13
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Equity in Earnings (Loss), Net of Tax
|
147
|
|
|
215
|
|
|
152
|
|
|
(514
|
)
|
|
—
|
|
|||||
Net Income (Loss)
|
$
|
48
|
|
|
$
|
304
|
|
|
$
|
208
|
|
|
$
|
(512
|
)
|
|
$
|
48
|
|
|
First Quarter 2018
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Income (Loss)
|
$
|
48
|
|
|
$
|
304
|
|
|
$
|
208
|
|
|
$
|
(512
|
)
|
|
$
|
48
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Currency Translation
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Unrealized Gain (Loss) on Cash Flow Hedges
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Reclassification of Cash Flow Hedges to Earnings
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Total Other Comprehensive Income (Loss), Net of Tax
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Total Comprehensive Income (Loss)
|
$
|
48
|
|
|
$
|
304
|
|
|
$
|
203
|
|
|
$
|
(512
|
)
|
|
$
|
43
|
|
|
First Quarter 2019
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Cash Provided by (Used for) Operating Activities
|
$
|
(132
|
)
|
|
$
|
(332
|
)
|
|
$
|
391
|
|
|
$
|
—
|
|
|
$
|
(73
|
)
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital Expenditures
|
—
|
|
|
(75
|
)
|
|
(48
|
)
|
|
—
|
|
|
(123
|
)
|
|||||
Proceeds from Divestiture of La Senza
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Proceeds from Sales of Marketable Equity Securities
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Return of Capital from Easton Investments
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Net Investments in Consolidated Affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net Cash Provided by (Used for) Investing Activities
|
—
|
|
|
(63
|
)
|
|
(43
|
)
|
|
—
|
|
|
(106
|
)
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings from Foreign Facilities
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|||||
Repayments of Foreign Facilities
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||||
Dividends Paid
|
(83
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|||||
Tax Payments related to Share-based Awards
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||||
Proceeds from Exercise of Stock Options
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Financing Costs and Other
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Net Financing Activities and Advances to/from Consolidated Affiliates
|
223
|
|
|
131
|
|
|
(354
|
)
|
|
—
|
|
|
—
|
|
|||||
Net Cash Provided by (Used for) Financing Activities
|
132
|
|
|
129
|
|
|
(347
|
)
|
|
—
|
|
|
(86
|
)
|
|||||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net Decrease in Cash and Cash Equivalents
|
—
|
|
|
(266
|
)
|
|
(1
|
)
|
|
—
|
|
|
(267
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Period
|
—
|
|
|
997
|
|
|
416
|
|
|
—
|
|
|
1,413
|
|
|||||
Cash and Cash Equivalents, End of Period
|
$
|
—
|
|
|
$
|
731
|
|
|
$
|
415
|
|
|
$
|
—
|
|
|
$
|
1,146
|
|
|
First Quarter 2018
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Cash Provided by (Used for) Operating Activities
|
$
|
(141
|
)
|
|
$
|
65
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(79
|
)
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital Expenditures
|
—
|
|
|
(91
|
)
|
|
(69
|
)
|
|
—
|
|
|
(160
|
)
|
|||||
Return of Capital from Easton Investments
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net Investments in Consolidated Affiliates
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
11
|
|
|
—
|
|
|||||
Net Cash Provided by (Used for) Investing Activities
|
—
|
|
|
(91
|
)
|
|
(79
|
)
|
|
11
|
|
|
(159
|
)
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings from Foreign Facilities
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|||||
Repayments of Foreign Facilities
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Dividends Paid
|
(168
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|||||
Repurchases of Common Stock
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
|||||
Tax Payments related to Share-based Awards
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Proceeds from Exercise of Stock Options
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Net Financing Activities and Advances to/from Consolidated Affiliates
|
397
|
|
|
(461
|
)
|
|
75
|
|
|
(11
|
)
|
|
—
|
|
|||||
Net Cash Provided by (Used for) Financing Activities
|
141
|
|
|
(461
|
)
|
|
88
|
|
|
(11
|
)
|
|
(243
|
)
|
|||||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
—
|
|
|
(487
|
)
|
|
4
|
|
|
—
|
|
|
(483
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Period
|
—
|
|
|
1,164
|
|
|
351
|
|
|
—
|
|
|
1,515
|
|
|||||
Cash and Cash Equivalents, End of Period
|
$
|
—
|
|
|
$
|
677
|
|
|
$
|
355
|
|
|
$
|
—
|
|
|
$
|
1,032
|
|
•
|
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;
|
•
|
shareholder activism matters;
|
•
|
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;
|
•
|
liabilities arising from divested businesses;
|
•
|
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.
|
Item 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
First Quarter
|
|||||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
Sales per Average Selling Square Foot
|
|
|
|
|
|
|||||
Victoria’s Secret U.S.
|
$
|
158
|
|
|
$
|
166
|
|
|
(5
|
%)
|
Bath & Body Works U.S.
|
160
|
|
|
150
|
|
|
7
|
%
|
||
Sales per Average Store (in thousands)
|
|
|
|
|
|
|||||
Victoria’s Secret U.S.
|
$
|
1,027
|
|
|
$
|
1,063
|
|
|
(3
|
%)
|
Bath & Body Works U.S.
|
413
|
|
|
381
|
|
|
8
|
%
|
||
Average Store Size (selling square feet)
|
|
|
|
|
|
|||||
Victoria’s Secret U.S.
|
6,540
|
|
|
6,419
|
|
|
2
|
%
|
||
Bath & Body Works U.S.
|
2,592
|
|
|
2,542
|
|
|
2
|
%
|
||
Total Selling Square Feet (in thousands)
|
|
|
|
|
|
|||||
Victoria’s Secret U.S.
|
6,959
|
|
|
7,189
|
|
|
(3
|
%)
|
||
Bath & Body Works U.S.
|
4,224
|
|
|
4,052
|
|
|
4
|
%
|
|
Stores Operating at
|
|
|
|
|
|
Stores Operating at
|
||||
|
February 2, 2019
|
|
Opened
|
|
Closed
|
|
May 4, 2019
|
||||
Victoria’s Secret U.S.
|
1,098
|
|
|
1
|
|
|
(35
|
)
|
|
1,064
|
|
Victoria’s Secret Canada
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
Total Victoria's Secret
|
1,143
|
|
|
1
|
|
|
(35
|
)
|
|
1,109
|
|
Bath & Body Works U.S.
|
1,619
|
|
|
14
|
|
|
(3
|
)
|
|
1,630
|
|
Bath & Body Works Canada
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
Total Bath & Body Works
|
1,721
|
|
|
14
|
|
|
(3
|
)
|
|
1,732
|
|
Victoria's Secret U.K. / Ireland
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
Victoria's Secret Beauty and Accessories
|
38
|
|
|
2
|
|
|
(2
|
)
|
|
38
|
|
Victoria's Secret China
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
Total Victoria's Secret and Bath & Body Works International
|
79
|
|
|
2
|
|
|
(2
|
)
|
|
79
|
|
Total L Brands Stores
|
2,943
|
|
|
17
|
|
|
(40
|
)
|
|
2,920
|
|
|
Stores Operating at
|
|
|
|
|
|
Stores Operating at
|
||||
|
February 3, 2018
|
|
Opened
|
|
Closed
|
|
May 5, 2018
|
||||
Victoria’s Secret U.S.
|
1,124
|
|
|
1
|
|
|
(5
|
)
|
|
1,120
|
|
Victoria’s Secret Canada
|
46
|
|
|
—
|
|
|
(1
|
)
|
|
45
|
|
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
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
Victoria's Secret Beauty and Accessories
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
Victoria's Secret China
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Total Victoria's Secret and Bath & Body Works International
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
Henri Bendel
|
27
|
|
|
—
|
|
|
(3
|
)
|
|
24
|
|
La Senza Canada
|
119
|
|
|
—
|
|
|
—
|
|
|
119
|
|
La Senza U.S.
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Total L Brands Stores
|
3,075
|
|
|
14
|
|
|
(20
|
)
|
|
3,069
|
|
|
Stores Operating at
|
|
|
|
|
|
Stores Operating at
|
||||
|
February 2, 2019
|
|
Opened
|
|
Closed
|
|
May 4, 2019
|
||||
Victoria’s Secret Beauty & Accessories
|
383
|
|
|
7
|
|
|
(12
|
)
|
|
378
|
|
Victoria's Secret
|
56
|
|
|
3
|
|
|
—
|
|
|
59
|
|
Bath & Body Works
|
235
|
|
|
9
|
|
|
(1
|
)
|
|
243
|
|
Total
|
674
|
|
|
19
|
|
|
(13
|
)
|
|
680
|
|
|
Stores Operating at
|
|
|
|
|
|
Stores Operating at
|
||||
|
February 3, 2018
|
|
Opened
|
|
Closed
|
|
May 5, 2018
|
||||
Victoria’s Secret Beauty & Accessories
|
397
|
|
|
13
|
|
|
(10
|
)
|
|
400
|
|
Victoria's Secret
|
37
|
|
|
6
|
|
|
—
|
|
|
43
|
|
Bath & Body Works
|
185
|
|
|
13
|
|
|
(3
|
)
|
|
195
|
|
La Senza
|
194
|
|
|
—
|
|
|
(2
|
)
|
|
192
|
|
Total
|
813
|
|
|
32
|
|
|
(15
|
)
|
|
830
|
|
|
|
|
|
|
Operating Income Rate
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
First Quarter
|
(in millions)
|
|
|
|
|
||||||||
Victoria’s Secret
|
$
|
33
|
|
|
$
|
83
|
|
|
2.2
|
%
|
|
5.2
|
%
|
Bath & Body Works
|
155
|
|
|
124
|
|
|
17.8
|
%
|
|
16.3
|
%
|
||
Victoria’s Secret and Bath & Body Works International
|
(4
|
)
|
|
(5
|
)
|
|
(3.0
|
%)
|
|
(3.6
|
%)
|
||
Other (a)
|
(31
|
)
|
|
(47
|
)
|
|
(26.9
|
%)
|
|
(33.5
|
%)
|
||
Total Operating Income
|
$
|
153
|
|
|
$
|
155
|
|
|
5.8
|
%
|
|
5.9
|
%
|
(a)
|
Includes Mast Global and corporate functions. Results for 2018 also include La Senza and Henri Bendel.
|
|
2019
|
|
2018
|
|
% Change
|
|||||
First Quarter
|
(in millions)
|
|
|
|||||||
Victoria’s Secret Stores (a)
|
$
|
1,149
|
|
|
$
|
1,236
|
|
|
(7
|
%)
|
Victoria’s Secret Direct
|
362
|
|
|
353
|
|
|
2
|
%
|
||
Total Victoria’s Secret
|
1,511
|
|
|
1,589
|
|
|
(5
|
%)
|
||
Bath & Body Works Stores (a)
|
715
|
|
|
649
|
|
|
10
|
%
|
||
Bath & Body Works Direct
|
156
|
|
|
112
|
|
|
40
|
%
|
||
Total Bath & Body Works
|
871
|
|
|
761
|
|
|
15
|
%
|
||
Victoria’s Secret and Bath & Body Works International (b)
|
135
|
|
|
135
|
|
|
—
|
%
|
||
Other (c)
|
112
|
|
|
141
|
|
|
(20
|
%)
|
||
Total Net Sales
|
$
|
2,629
|
|
|
$
|
2,626
|
|
|
—
|
%
|
(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. Results for 2018 also include store and direct sales for La Senza and Henri Bendel.
|
|
Victoria’s
Secret
|
|
Bath &
Body Works
|
|
Victoria’s Secret
and
Bath & Body Works International
|
|
Other
|
|
Total
|
||||||||||
First Quarter
|
(in millions)
|
||||||||||||||||||
2018 Net Sales
|
$
|
1,589
|
|
|
$
|
761
|
|
|
$
|
135
|
|
|
$
|
141
|
|
|
$
|
2,626
|
|
Comparable Store Sales
|
(86
|
)
|
|
44
|
|
|
(6
|
)
|
|
—
|
|
|
(48
|
)
|
|||||
Sales Associated with New, Closed and Non-comparable Remodeled Stores, Net
|
(12
|
)
|
|
23
|
|
|
19
|
|
|
—
|
|
|
30
|
|
|||||
Divested/Closed Businesses
|
—
|
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
(68
|
)
|
|||||
Foreign Currency Translation
|
(1
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Direct Channels
|
4
|
|
|
45
|
|
|
2
|
|
|
—
|
|
|
51
|
|
|||||
Private Label Credit Card
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
International Wholesale, Royalty and Other
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
39
|
|
|
29
|
|
|||||
2019 Net Sales
|
$
|
1,511
|
|
|
$
|
871
|
|
|
$
|
135
|
|
|
$
|
112
|
|
|
$
|
2,629
|
|
(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 or owned 12 months or more and it has not had a change in selling square footage of 20% or more. 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.
|
First Quarter
|
2019
|
|
2018
|
||||
Average daily borrowings (in millions)
|
$
|
5,878
|
|
|
$
|
5,845
|
|
Average borrowing rate (in percentages)
|
6.6
|
%
|
|
6.5
|
%
|
|
May 4,
2019 |
|
February 2,
2019 |
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Senior Debt with Subsidiary Guarantee
|
|
|
|
|
|
||||||
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)
|
$
|
990
|
|
|
$
|
990
|
|
|
$
|
990
|
|
$956 million, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)
|
952
|
|
|
952
|
|
|
994
|
|
|||
$780 million, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)
|
777
|
|
|
776
|
|
|
995
|
|
|||
$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
|
|
|
497
|
|
|||
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)
|
496
|
|
|
496
|
|
|
495
|
|
|||
$338 million, 7.00% Fixed Interest Rate Notes due May 2020 (“2020 Notes”)
|
338
|
|
|
337
|
|
|
398
|
|
|||
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)
|
274
|
|
|
273
|
|
|
—
|
|
|||
Secured Foreign Facilities
|
91
|
|
|
91
|
|
|
12
|
|
|||
Total Senior Debt with Subsidiary Guarantee
|
$
|
5,109
|
|
|
$
|
5,106
|
|
|
$
|
5,074
|
|
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”)
|
297
|
|
|
297
|
|
|
297
|
|
|||
Unsecured Foreign Facilities
|
67
|
|
|
60
|
|
|
89
|
|
|||
Total Senior Debt
|
$
|
712
|
|
|
$
|
705
|
|
|
$
|
734
|
|
Total
|
$
|
5,821
|
|
|
$
|
5,811
|
|
|
$
|
5,808
|
|
Current Debt
|
(72
|
)
|
|
(72
|
)
|
|
(89
|
)
|
|||
Total Long-term Debt, Net of Current Portion
|
$
|
5,749
|
|
|
$
|
5,739
|
|
|
$
|
5,719
|
|
|
May 4,
2019 |
|
February 2, 2019
|
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Net Cash Provided by (Used for) Operating Activities (a)
|
$
|
(73
|
)
|
|
$
|
1,377
|
|
|
$
|
(79
|
)
|
Capital Expenditures (a)
|
123
|
|
|
629
|
|
|
160
|
|
|||
Working Capital
|
750
|
|
|
1,274
|
|
|
1,032
|
|
|||
Capitalization:
|
|
|
|
|
|
||||||
Long-term Debt
|
5,749
|
|
|
5,739
|
|
|
5,719
|
|
|||
Shareholders’ Equity (Deficit)
|
(902
|
)
|
|
(869
|
)
|
|
(971
|
)
|
|||
Total Capitalization
|
$
|
4,847
|
|
|
$
|
4,870
|
|
|
$
|
4,748
|
|
Remaining Amounts Available Under Credit Agreements (b)
|
$
|
990
|
|
|
$
|
991
|
|
|
$
|
991
|
|
(a)
|
The
February 2, 2019
amounts represent a 52-week period, and the
May 4, 2019
and
May 5, 2018
amounts represent 13-week periods.
|
(b)
|
Letters of credit issued reduce our remaining availability under the Secured Revolving Facility. We had outstanding letters of credit that reduced our remaining availability under the Secured Revolving Facility of
$10 million
as of
May 4, 2019
, and
$9 million
as of
February 2, 2019
and
May 5, 2018
.
|
|
Moody’s
|
|
S&P
|
Corporate
|
Ba1
|
|
BB
|
Senior Unsecured Debt with Subsidiary Guarantee
|
Ba1
|
|
BB
|
Senior Unsecured Debt
|
Ba2
|
|
B+
|
Outlook
|
Negative
|
|
Negative
|
|
Amount
Authorized
|
|
Shares
Repurchased
|
|
Amount
Repurchased
|
|
Average Stock Price of Shares Repurchased within Program
|
||||||||
Repurchase Program
|
|
|
|
||||||||||||
|
(in millions)
|
|
(in thousands)
|
|
(in millions)
|
|
|
||||||||
March 2018
|
$
|
250
|
|
|
|
1,563
|
|
|
$
|
58
|
|
|
$
|
36.93
|
|
September 2017
|
250
|
|
|
|
527
|
|
|
25
|
|
|
$
|
46.98
|
|
||
Total
|
|
|
|
2,090
|
|
|
$
|
83
|
|
|
|
|
|
Ordinary Dividends
|
|
Total Paid
|
||||
|
|
(per share)
|
|
(in millions)
|
||||
2019
|
|
|
|
|
||||
First Quarter
|
|
$
|
0.30
|
|
|
$
|
83
|
|
2018
|
|
|
|
|
||||
First Quarter
|
|
$
|
0.60
|
|
|
$
|
168
|
|
|
Year-to-Date
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Cash and Cash Equivalents, Beginning of Period
|
$
|
1,413
|
|
|
$
|
1,515
|
|
Net Cash Flows Used for Operating Activities
|
(73
|
)
|
|
(79
|
)
|
||
Net Cash Flows Used for Investing Activities
|
(106
|
)
|
|
(159
|
)
|
||
Net Cash Flows Used for Financing Activities
|
(86
|
)
|
|
(243
|
)
|
||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
(2
|
)
|
|
(2
|
)
|
||
Net Decrease in Cash and Cash Equivalents
|
(267
|
)
|
|
(483
|
)
|
||
Cash and Cash Equivalents, End of Period
|
$
|
1,146
|
|
|
$
|
1,032
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
May 4,
2019 |
|
February 2, 2019
|
|
May 5,
2018 |
||||||
|
(in millions)
|
||||||||||
Long-term Debt:
|
|
|
|
|
|
||||||
Principal Value
|
$
|
5,722
|
|
|
$
|
5,722
|
|
|
$
|
5,750
|
|
Fair Value, Estimated (a)
|
5,486
|
|
|
5,340
|
|
|
5,735
|
|
|||
Foreign Currency Cash Flow Hedges (b)
|
(3
|
)
|
|
(2
|
)
|
|
1
|
|
|||
Marketable Equity Securities (b)
|
(8
|
)
|
|
(11
|
)
|
|
(17
|
)
|
(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.
|
(b)
|
Financial instruments are in a net liability (asset) position.
|
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)
|
||||||||
February 2019
|
4
|
|
|
$
|
26.59
|
|
|
—
|
|
|
$
|
78,677
|
|
March 2019
|
327
|
|
|
27.04
|
|
|
—
|
|
|
78,677
|
|
||
April 2019
|
3
|
|
|
27.48
|
|
|
—
|
|
|
78,677
|
|
||
Total
|
334
|
|
|
|
|
—
|
|
|
|
(a)
|
The total number of shares repurchased includes shares repurchased as part of publicly announced programs, with the remainder relating to 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
4
, “Earnings 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
|
|
|
|
|
|
10.1
|
|
|
|
|
|
15
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
L B
RANDS
, I
NC
.
|
|
|
(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.
|
1.
|
I have reviewed this report on Form 10-Q of L Brands, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ LESLIE H. WEXNER
|
|
Leslie H. Wexner
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of L Brands, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ STUART B. BURGDOERFER
|
|
Stuart B. Burgdoerfer
|
|
Executive Vice President and
Chief Financial Officer |
(i)
|
the Quarterly Report of the Company on Form 10-Q dated
June 4, 2019
for the period ending
May 4, 2019
(the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(ii)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ LESLIE H. WEXNER
|
|
Leslie H. Wexner
|
|
Chairman and Chief Executive Officer
|
|
|
|
/s/ STUART B. BURGDOERFER
|
|
Stuart B. Burgdoerfer
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Executive Vice President and Chief Financial Officer
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