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L Brands Q4 and FY15 earnings rise 14 percent

By Prachi Singh

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Business |REPORT

L Brands earnings per share for the fourth quarter ended January 30, 2016, increased 14 percent to 2.15 dollars from 1.89 dollars for the quarter ended January 31, 2015. Adjusted earnings per share for the year, which exclude a 78.1 million dollars (0.23 dollar per share) first quarter pre-tax gain on the sale of the company’s remaining interest in the third-party apparel sourcing business, increased 14 percent to 3.99 dollars compared to 3.50 dollars for the year ended January 31, 2015.

Commenting on the results, Leslie H. Wexner, Chairman and CEO said, “We delivered record results in a year when many retailers struggled. These results are a reflection of the strength of our brands and were driven by tremendous focus and execution across the enterprise. I am very optimistic heading into 2016 and confident in our growth opportunities.”

Fourth quarter and FY15 result highlights

Fourth quarter operating income increased 13 percent to 1.078 billion dollars from 957 million dollars last year. Net income increased 13 percent to 636 million dollars compared to 564.8 million dollars last year.

Net sales for the fourth quarter were 4.395 billion dollars, an increase of 8 percent compared to 4.069 billion dollars for the quarter ended January 31, 2015. Comparable store sales increased 6 percent.

Full-year operating income increased 12 percent to 2.192 billion dollars compared to 1.953 billion dollars last year, and adjusted net income was 1.184 billion dollars compared to 1.042 billion dollars last year.

Net sales for the year were 12.154 billion dollars, an increase of 6 percent compared to 11.454 billion dollars for the year ended January 31, 2015. Comparable store sales increased 5 percent.

Reveals outlook for 2016

The company currently expects 2016 full-year earnings per share to be between 3.90 dollars and 4.10 dollars, including earnings per share between 0.50 dollars and 0.55 dollars in the first quarter. The 2016 earnings per share forecast includes negative impacts related to continued pressure from foreign currency exchange rates and incremental interest expense related to the 1 billion dollars October 2015 note issuance.

The company expects to report a mid-single digit increase in February comparable store sales, above expectations for a low-single digit increase, reflecting a mid-single digit increase at both Victoria’s Secret and Bath & Body Works.

L BRANDS