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Limited Brands says net income falls in last quarter

24
Feb '12
Limited Brands Inc reported 2011 fourth quarter and full-year results. Adjusted earnings per share for the fourth quarter ended Jan. 28, 2012, which exclude certain significant items as detailed below, increased 19 percent to $1.50 compared to $1.26 for the quarter ended Jan. 29, 2011. Fourth quarter adjusted operating income was $786.5 million compared to $713.5 million last year, and adjusted net income was $459.2 million compared to $419.7 million last year.

Including the significant items below, reported fourth quarter earnings per share were $1.17 compared to $1.36 last year; operating income was $641.1 million compared to $713.5 million last year; and net income was $359.4 million compared to $452.3 million last year.

Significant items are as follows:
In 2011 (totaling to a charge of $0.33 per share):
• A pre-tax gain of $110.8 million, or $0.32 cents per share, related to the sale of our third party apparel sourcing business;
• A pre-tax, principally non-cash charge of $256.1 million, or $0.74 per share, related to intangible asset impairment and restructuring charges, including store closures, at La Senza; and
• A tax benefit of $28.4 million, or $0.09 cents per share, related to certain discrete tax matters.

In 2010 (totaling to a benefit of $0.10 per share):
• A pre-tax gain of $44.9 million, or $0.09 per share, related to the sale of Express stock; and
• A pre-tax gain of $7.1 million, or $0.01 per share, related to an Express dividend payment.

The company reported a comparable store sales increase of 7 percent for the fourth quarter ended Jan. 28, 2012, compared to the fourth quarter ended Jan. 29, 2011. The company reported net sales of $3.515 billion for the fourth quarter ended Jan. 28, 2012, compared to sales of $3.456 billion last year.

Total sales were negatively impacted by the sale of our third party apparel sourcing business in the beginning of November 2011.

Adjusted earnings per share for the year ended Jan. 28, 2012, which exclude certain significant items, increased 26 percent to $2.60 compared to $2.06 for the year ended Jan. 29, 2011. Adjusted operating income was $1.546 billion in 2011 compared to $1.284 billion in 2010, and adjusted net income was $817.3 million compared to $684.5 million in 2010.

Including significant items, reported 2011 full-year earnings per share were $2.70 compared to $2.42 in 2010; operating income was $1.238 billion compared to $1.284 billion in 2010; and net income was $850.1 million compared to $804.8 million in 2010.

The company reported a comparable store sales increase of 10 percent for the year ended Jan. 28, 2012, compared to the year ended Jan. 29, 2011. The company reported net sales of $10.364 billion for the year ended Jan. 28, 2012, compared to sales of $9.613 billion last year.

2012 Outlook
The company currently expects 2012 full-year earnings per share to be between $2.60 and $2.80, including earnings per share between $0.35 and $0.40 in the first quarter.

The company expects to report a February comparable store sales increase in the mid to high single digit range, versus its previous estimate of up low single digits.

Limited Brands, through Victoria's Secret, Pink, Bath & Body Works, La Senza and Henri Bendel, is an international company. The company operates 2,623 specialty stores in the United States and its brands are sold in more than 600 company-operated and franchised additional locations world-wide.

Limited Brands Inc


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