L Brands, Inc. reported 2020 third quarter results ended 31st October, 2020.
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The company reported earnings per share of $1.17 for the third quarter ended 31st October, 2020, compared to a loss per share of $0.91 for the quarter ended 2nd November, 2019. Third quarter operating income was $580.6 million compared to an operating loss of $151.2 million last year, and net income was $330.6 million compared to a net loss of $252.0 million last year.
In 2020, a net gain totaled $0.04 per share resulted from a $52.7 million pre-tax loss ($0.14 per share) on early extinguishment of debt;a $29.9 million pre-tax gain ($0.10 per share) related to the establishment of a joint venture for the Victoria’s Secret U.K. business with Next PLC; and a $23.1 million net tax benefit ($0.08 per share) related to tax matters associated with foreign investments and recent changes in tax legislation.
In 2019, charges of $0.93 per share resulted from a $247.5 million non-cash pre-tax impairment charge ($0.83 per share) related to certain Victoria’s Secret store and other assets; and a $37.2 million pre-tax charge ($0.10 per share) to increase reserves related to ongoing guarantees for the La Senza business which was sold in the fourth quarter of 2018.
Excluding the above items, adjusted third quarter earnings per share were $1.13 compared to $0.02 last year, adjusted operating income was $550.7 million compared to $96.3 million last year, and adjusted net income was $320.3 million compared to $5.7 million last year.
The company reported net sales of $3.055 billion for the 13 weeks ended 31st October, 2020, compared to net sales of $2.677 billion for the quarter ended 2nd November, 2019. Comparable sales increased 28 percent for the quarter ended 31st October, 2020.
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Andrew Meslow, Chief Executive Officer of L Brands, stated “L Brands reported a record third quarter, driven by exceptional results and continued strength at Bath & Body Works, and a significant improvement in performance at Victoria’s Secret. On behalf of the Board of Directors and the management team, I would like to express our sincere appreciation to our associates, whose hard work and dedication during these unprecedented times made these results possible. As we head into the holidays, our inventories are well-positioned, and we are encouraged by customers’ early response to our merchandise assortments. However, we are cautious about our ability to exceed last year’s fourth quarter sales and earnings results, given anticipated constraints on store traffic, online fulfillment and shipping capacity, as well as other uncertainties related to the COVID pandemic. We are confident in the strength of our brands and remain focused on execution and delivering the best possible outcome for the fourth quarter.”