Limited Brands announces 49% increase in adjusted Q4 EPS

02 Mar '10

3 min read

Limited Brands, Inc. reported 2009 fourth quarter and full-year results.

Fourth Quarter Results

Adjusted earnings per share for the fourth quarter ended Jan. 30, 2010, which exclude certain significant items as detailed below, increased 49 percent to $1.01 compared to $0.68 for the quarter ended Jan. 31, 2009. Fourth quarter adjusted operating income was $585.5 million compared to $390.7 million last year, and adjusted net income was $332.8 million compared to $218.9 million last year.

Including the significant items below, reported fourth quarter earnings per share were $1.08 compared to $0.05 last year; operating income was $585.5 million compared to $153.1 million last year; and net income was $356.1 million compared to $16.1 million last year.

Significant items are as follows:

In 2009 (totaling to a benefit $0.07 per share):

• An income tax benefit of $23.3 million, primarily related to the reorganization of certain foreign subsidiaries.

In 2008 (totaling to a net charge of $0.63 per share):

• A pre-tax non-cash impairment charge of $215.0 million, or $0.63 per share, to reduce the carrying value of La Senza goodwill and other intangible assets;
• A pre-tax charge of $22.6 million, or $0.04 per share, for severance related to the reduction of roughly 10 percent of home office headcount; and
• A tax benefit of $15.0 million, or $0.05 per share, primarily related to certain discrete foreign and state income tax items.

The company reported a comparable store sales increase of 1 percent for the fourth quarter ended Jan. 30, 2010. Net sales were $3.063 billion compared to net sales of $2.991 billion last year.

Full-Year Results

Adjusted earnings per share for the year ended Jan. 30, 2010, which exclude certain significant items, increased 17 percent to $1.23 compared to $1.05 for the year ended Jan. 31, 2009. Adjusted 2009 operating income was $858.3 million compared to $717.5 million in 2008, and adjusted net income was $401.8 million compared to $353.4 million in 2008.

Including significant items, reported 2009 full-year earnings per share were $1.37 compared to $0.65 in 2008; operating income was $867.7 million compared to $588.9 million in 2008; and net income was $447.9 million compared to $220.1 million in 2008.

At the conclusion of this press release is a reconciliation of reported to adjusted results, including a description of the significant items.

The company reported a comparable store sales decrease of 4 percent for the year ended Jan. 30, 2010. Net sales were $8.632 billion compared to net sales of $9.043 billion last year.

2010 Outlook

Chairman and CEO Leslie Wexner stated, "The economic environment in 2009 was very challenging. We managed inventory, expenses and capital conservatively. We focused on executing with flexibility and speed, and those disciplines helped us achieve better results in the fourth quarter. We made good progress, but we recognize there is more to do and are very focused on continued improvement."

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